On December 20, 2017, PaperWorks Industries, Inc. and certain of its affiliates and five holders of the company’s 9.500% Senior Secured Notes due 2019 holding approximately 87% of the outstanding Notes (the “Ad Hoc Group”), entered into a restructuring support agreement (RSA) regarding a comprehensive financial restructuring of the company’s debt and equity structure. Among other things, the proposed restructuring will reduce the company’s long-term debt by approximately $275 million, which represents approximately 70% of the funded indebtedness, through a repayment of the existing ABL credit facility and an exchange of the Notes for new debt and new common equity in the reorganized company. Under the RSA, the pro forma capital structure will consist of a $115 million post-restructuring financing facility, inclusive of $70 million of new capital back stopped by the Ad Hoc Group.
“The planned restructuring will establish a strong and sustainable debt and equity structure that will enable us to maximize value for all our stakeholders,” said C. Anderson “Andy” Bolton, Chief Executive Officer of the company. “This restructuring will ensure continuity of supply to the company’s valued customers, protects our vendors and workforce and provides enhanced financial flexibility moving forward. I would especially like to thank our customers, vendors and employees for their patience and support as we move through this process. We are excited to be partnering with our noteholders in the ownership of our business.”
As the proposed restructuring is solely focused on the company’s Notes and ABL credit facility, it will not impact customers, employees, vendors, nor other secured and unsecured creditors. The company will continue to honor its obligations to such parties in the ordinary course of business with no disruptions. The restructuring process is expected to conclude by the end of March 2018.