Venator Materials expects to emerge from bankruptcy in coming weeks

By Sarah Lizee

Olympia, Wash., July 26 – Venator Materials plc said it expects to emerge from Chapter 11 bankruptcy in the coming weeks after it receives regulatory approvals, according to a press release issued Wednesday.

As previously reported, the company’s plan of reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas on July 19.

The pre-packaged plan had been accepted by both voting classes.

Specifically, 93 holders, or 96.875% in number, of $361.51 million, or 99.22% in amount, of senior unsecured notes claims voted to accept the plan, while three holders, or 3.125% in number, of $2.84 million, or 0.78% in amount, voted to reject the plan.

All 186 holders of $486.96 million of senior secured claims voted to accept the plan.

As background, the company filed bankruptcy on May 14 to implement a recapitalization plan reached with a majority of its lenders and noteholders.

The company said the agreement will equitize nearly all of its funded debt, strengthen its balance sheet and facilitate an infusion of new capital.

The company has $1.14 billion of prepetition debt, including $190 million under an asset-based lending facility with JPMorgan Chase Bank, NA as agent, $354 million under a term loan facility with Acquiom Agency Services LLC and Seaport Loan Products LLC as agents, and $225 million in senior secured notes and $375 million in senior notes with Wilmington Trust, NA as trustee.

The restructuring support agreement provides for the following terms:

• The refinancing of all of the debt owed under the company’s asset-backed revolving credit facility;

• The equitization of the rest of the company’s funded debt, including the senior secured term loan facility, the 9½% senior secured notes due 2025 and the 5¾% senior notes due 2025;

• A commitment from the consenting creditors to backstop, if necessary, (i) an equity rights offering and the issuance of ordinary shares by the company to the consenting creditors on the plan effective date, and/or (ii) an exit first-lien term loan facility to be entered into on the plan effective date and on terms to be agreed;

• Payment in full of all trade claims;

• 100% recovery to holders of other secured claims, other priority claims and general unsecured claims;

• Establishment of a customary management equity incentive plan after the effective date; and

• No recovery for existing equity interests.

According to an indicative term sheet filed Sunday, the company plans to enter into a $250 million exit ABL revolver with a $100 million accordion and a letter-of-credit sublimit of up to $125 million.

Citigroup Inc. will be the administrative agent.

The facility will mature three years from close and bear interest at SOFR plus a 10 basis points credit spread adjustment plus 350 bps. There will be an unused fee that ranges from 37.5 bps to 50 bps.

The Woodlands, Tex.-based manufacturer and marketer of chemical products filed bankruptcy on May 14 under Chapter 11 case number 23-90301.

© 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.