Remy noteholders approve pre-packaged plan; Chapter 11 filing expected 'promptly'

By Caroline Salls

Pittsburgh, Oct. 2 - Remy Worldwide Holdings, Inc. said it has received overwhelming acceptance of its pre-packaged plan of reorganization from holders of its 8 5/8% senior notes, 9 3/8% senior subordinated notes and 11% senior subordinated notes.

According to a company news release, more than 99.9% in dollar amount and 98.1% in number of the 8 5/8% senior noteholders that voted accepted the plan, while the voting 9 3/8% and 11% senior subordinated noteholders unanimously accepted it.

The company said it will now "promptly" make its pre-packaged Chapter 11 filing.

"We are extremely pleased with the overwhelming support we received from our noteholders and we are working expeditiously to initiate our pre-packaged Chapter 11 filing as planned," president and chief executive officer John Weber said in the release.

As previously reported, on June 15 the company entered into a plan support agreement with holders of about 83% of the 8 5/8% senior notes, 84% of the 9 3/8% senior subordinated notes and 75% of the 11% senior subordinated notes on the terms of a consensual financial restructuring that will reduce the company's debt by $360 million.

Remy and the consenting noteholders have agreed to complete the restructuring through a pre-packaged plan of reorganization, and the consenting noteholders have agreed to backstop a rights offering of new preferred stock that will provide about $85 million of new capital to fund the plan and the company's post-bankruptcy operations.

Under the pre-packaged plan, the company will:

• Repay its second-priority senior secured floating-rate notes in full;

• Raise $85 million in preferred equity through a rights offering to be made to holders of its senior notes and senior subordinated notes;

• Exchange its existing 8 5/8% senior notes for $100 million of new third-lien pay-in-kind notes $45 million in cash, plus roughly $10 million interest, and up to $2 million in new preferred stock for post-bankruptcy interest;

• Convert the 9 3/8% senior subordinated notes and 11% senior subordinated notes into 100% of the common equity of the reorganized company; and

• Cancel all of its existing equity interests.

The company has a commitment for $225 million in debtor-in-possession financing and a $330 million exit facility, with Barclays as the lead arranger on the exit facility and the DIP facility.

Remy is an Anderson, Ind.-based manufacturer, remanufacturer and distributor of Delco Remy brand heavy-duty starters and alternators and Remy brand starters and alternators, locomotive products and hybrid power technology.

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