WorldStrides wins approval of amended pre-packaged reorganization plan

By Caroline Salls

Pittsburgh, Sept. 17 – Lakeland Tours, LLC, which does business as WorldStrides, obtained confirmation of its amended pre-packaged plan of reorganization, according to an order filed with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, WorldStrides agreed to a comprehensive recapitalization with its principal shareholders and some of its lenders that is expected to reduce the company’s debt and provide access to significant new financing, which will support its business plan going forward, including while navigating the Covid-19 pandemic.

Vendors and other partners were expected to be paid in full in the ordinary course of business.

Under the recapitalization agreement, some of the consenting lenders and the company’s sponsors will provide a $366 million debtor-in-possession financing facility.

A 3% commitment premium will be payable to all DIP lenders and the sponsors, and a 5% backstop premium will be paid to a backstop group and the sponsors.

Upon emergence from Chapter 11, the lender DIP loans will be exchanged for $108 million of loans under a priority exit facility, plus 20% of holding company loans, the DIP roll-up loans for a $150 million second-out facility and the sponsor DIP loans for 100% of the new common stock in the reorganized company, subject to dilution by a management incentive plan.

The existing letters of credit will roll over into the priority exit facility.

Existing hedges will be reinstated and secured equal to the obligations under the second-out facility.

Holders of other loan claims will receive a share of a $200 million third-out facility and the holding company loans.

Seller notes, existing equity interests and subordinated claims will be cancelled with no distribution to holders.

Any outstanding and undisputed general unsecured claims, as well as administrative claims, priority tax claims and other secured claims, will be paid in full in cash or receive another treatment that renders them unimpaired.

WorldStrides is a Charlottesville, Va.-based provider of educational student travel. The company filed bankruptcy on July 20 under Chapter 11 case number 20-11647.

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