Windstream seeks OK to enter rights offering backstop commitment

By Caroline Salls

Pittsburgh, March 16 – Windstream Holdings, Inc. requested court approval to enter into a rights offering backstop commitment agreement, according to a motion filed Friday with the U.S. Bankruptcy Court for the Southern District of New York.

The company said holders of first-lien claims against the Windstream debtors will receive a cash paydown with proceeds from up to $2.4 billion in new exit financing and a $750 million equity rights offering backstopped by Elliott Investment Management, LP and some members of a first-lien debtholders group.

“The rights offering is critical to ensuring that the debtors have sufficient cash at emergence from Chapter 11 to make [cash distributions],” the motion said.

As of Friday, Windstream said the equity backstop parties were the only one who had committed to fund the high cash costs of its emergence.

In return for this commitment, the backstop parties will receive at 8% premium payable in new common stock.

“The backstop parties invested significant time and resources over several months negotiating the terms of the plan support agreement,” the motion said.

“And without their commitment to support the debtors’ restructuring and backstop the full rights offering amount, the debtors would not have a viable path to exit these Chapter 11 cases – there is no other confirmable transaction structure available to the debtors at this time.”

A hearing is scheduled for April 3.

Windstream is a Little Rock, Ark., telecommunications provider. The company filed bankruptcy on Feb. 25, 2019 under Chapter 11 case number 19-22312.

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