Monitronics emerges from bankruptcy, merges with Ascent Capital

By Caroline Salls

Pittsburgh, Aug. 30 – Monitronics International, Inc. emerged from Chapter 11 bankruptcy Friday and merged with Ascent Capital Group, Inc., according to a company news release.

Monitronics’ partially pre-packaged plan of reorganization was confirmed on Aug. 7 by the U.S. Bankruptcy Court for the Southern District of Texas.

As a result of its financial recapitalization, Monitronics said its largest shareholders will be EQT Credit and Brigade Capital Management.

Trading of the new Monitronics shares is expected to begin on or before Sept. 4. The shares will trade on the OTC Markets under the symbol SCTY.

“This is an exciting day for Monitronics as we have emerged as a stronger, more focused organization,” Monitronics president and chief executive officer Jeffery Gardner said in the release.

“With renewed balance sheet strength, a strong subscriber portfolio and recurring revenue base and the support of EQT and Brigade, two highly regarded financial sponsors, we are well-positioned to be a leader in the accelerating home security market and to execute on the vast growth opportunities ahead.”

Monitronics said it emerged from Chapter 11 protection having eliminated $885 million of debt, including $585 million principal amount of its 9 1/8% senior notes due 2020, $250 million of term loans and $50 million of revolving loans.

The company said holders of the senior notes received cash for 14% of the notes, and the remainder, along with the company’s term loans, was converted into equity.

A total of $823 million of Monitronics’ term loans were converted into a new term loan facility.

Upon emergence, the company also gained access to $295 million of additional liquidity under new exit financing, consisting of a $150 million term loan facility, and a $145 million revolving facility, to support its continued growth and ensure it can continue to execute on its strategic plan.

Monitronics said it further reduced outstanding debt and paid fees and expenses related to the recapitalization transactions from the receipt of an additional $200 million of cash comprised of $177 million in proceeds through an equity rights offering and $23 million from Ascent in consideration for which the Ascent shareholders received a total of 5.82% of the equity of the company based on a final exchange ratio of 0.1043086 of a share of Monitronics common stock for each outstanding share of Ascent common stock.

In tandem with the completion of the restructuring, the company appointed a new board of directors. The new board is comprised of Gardner, chairman Michael J. Kneeland, EQT Partners partner Stephen Escudier, EQT Partners partner and EQT Credit head Andrew Konopelski, former Monitronics chief financial officer Michael Meyers, former Mohegan Gaming Authority & Entertainment CEO Mitchell G. Etess and Redan Advisors LLC managing member Patrick J. Bartels Jr.

Monitronics was represented in the recapitalization by Latham & Watkins LLP, King & Spalding LLP, Hunton Andrews Kurth LLP, Moelis & Co. LLC and FTI Consulting Inc.

Monitronics is a Dallas-based home security alarm monitoring company. The company filed bankruptcy on June 30 under Chapter 11 case number 19-33650.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.