Yesterday's auction of Optimal shares relating to a funds interest in Madoff recoveries created an exchange of sorts in Madoff paper but not for those who need it most...the customers.
The realities of the distress are that no matter how valuable EK's patent portfolio is, and I've said before, it doesn't appear to be that valuable (not Nortel), any buyer is going to want to pursue this transaction in the cleanest way possible, ie, bankruptcy 363 sale, to avoid successor liability and break away from litigation risks. Bankruptcy has enormous costs associated with it and is essentially a feast for professionals (who are very hungry right now). That said, if there are multiple buyers, equity can be worth something
Why Horizon Lines Should Declare Bankruptcy [View article]
Some good news on Horizon Lines today.
Horizon Lines, Inc. announced that it has completed a comprehensive refinancing of the company's entire capital structure. The new capital structure addresses the company's financial needs by providing adequate liquidity to fund continuing operations and the ability to achieve substantial additional debt reduction.
"We now have a new capital structure that eliminates the refinancing uncertainty faced by our company over the past several months and better positions us for the future," said Stephen H. Fraser, president and CEO. "We have put in place a solid financial foundation that affords us the opportunity to grow our business and significantly reduce debt over time."
The terms of the recapitalization, which results in a $652.8 million financial restructuring, consist of the following:
Certain holders of the 4.25% convertible senior notes due 2012 (the "2012 convertible notes") and certain other parties purchased $225 million of 11.00% first-lien secured notes. The notes mature in October 2016, and are callable at 101.5% of the aggregate principal plus accrued and unpaid interest in year one, and at par plus accrued and unpaid interest thereafter.
Certain holders of the 2012 convertible notes and certain other parties also purchased $100 million of second lien secured notes, maturing in October 2016. The second lien notes bear interest, payable semi-annually at a rate of 13.00% per annum if paid in cash, 14.00% per annum if paid 50% in cash and 50% in kind, and 15.00% per annum if paid in kind, at the company's option. The $100 million amount includes second lien notes that were issued in exchange for a $25 million bridge loan that was entered into in September 2011, with the remaining $75 million issued at par. The new second lien secured notes are non callable for two years. After that, they are callable at 106% of the aggregate principal plus accrued and unpaid interest in year three, at 103% plus accrued and unpaid interest in year four, and at par plus accrued and unpaid interest thereafter.
Additionally, the company and its subsidiaries entered into a new, $100 million, asset-based revolving credit facility arranged through Wells Fargo Capital Finance to provide liquidity for continuing operations. Availability under the ABL facility is based on a percentage of eligible accounts receivable, up to a maximum of $100 million. The ABL facility matures in October 2016, although the maturity will accelerate by 90 days if the first-lien notes and second-lien notes have not been repaid, refinanced or defeased by such date. The ABL facility bears interest at a floating rate based on a specified spread over LIBOR. The initial rate will be LIBOR plus 3.25%. No amounts were drawn at the closing date, although there were $19.1 million of outstanding letters of credit under the ABL facility, with $67.1 million available for borrowing.
The company also completed its exchange offer and consent solicitation, in which $178.8 million of new 6.00% Series A convertible senior secured notes due April 15, 2017, $99.3 million of new 6.00% Series B mandatorily convertible senior secured notes, and $49.7 million of common stock and warrants, issued at $1.00 par value, were exchanged for the $327.8 million of 2012 convertible notes that were validly tendered in the exchange offer. In total, 99.3% of the $330.0 million of 2012 convertible notes were validly tendered in the exchange offer. Interest on the new notes is payable semi-annually in cash. The Series A Notes are convertible at the option of the holders, and at the company's option under certain circumstances beginning on the one-year anniversary of their issuance, into shares of common stock or warrants, as described below. The Series B Notes are mandatorily convertible into shares of the company's common stock or warrants in two equal installments of approximately $49.7 million each on the three-month and nine-month anniversaries of the consummation of the exchange offer, subject to certain conditions, as described below.
"We greatly appreciate the support of our note holders, previous lender group and the new lenders to facilitate this comprehensive and complex refinancing in an orderly and timely manner," said Michael T. Avara, Executive Vice President and Chief Financial Officer. "We also are grateful to our teams of advisors from Kirkland & Ellis LLP and Moelis & Company for their expert advice, creativity and diligence through this arduous process. Our thanks further extends to Paul, Weiss, Rifkind, Wharton & Garrison LLP and Houlihan Lokey, who were the legal and financial advisors, respectively, to the holders of the 2012 convertible notes, for their important contributions."
Horizon Lines, Inc. is a domestic ocean shipping and integrated logistics company.
What Investors Must Know About A Kodak Bankruptcy [View article]
Not to beat a dead horse but: 1. Patents-Comps to Nortel IP seems unwarranted as different type of IP. Furthermore, litigation around many of the patents. 2. Liquidation of other assets-Company has undertaken a slow liquidation for several years and probably is left with weaker yielding assets. Furthermore, EK know as one of the worst polluters in NYS so ENVIRONMENTAL RISKS are great. Remember, we're talking about chemicals here. 3. It's all about the burn. If EK burns alot of cash, and the process takes a long time, equity and maybe debt will be further eroded. Typically, with legacy companies like EK, restructurings drag on.
Siemens Affiliate Bids to Acquire HearUSA's Assets [View instapost]
Deal closed on Friday...hopefully professionals don't rob the bank. If not, its a very nice payout. You would think with returns like this, we should be able to raise more money.
Siemens Affiliate Bids to Acquire HearUSA's Assets [View instapost]
Holy Toledo Batman, Siemens really paid up for this one. Bottom line is if enough shareholders don't file, there could be further value for the common.
Siemens Affiliate Bids to Acquire HearUSA's Assets [View instapost]
Equity Committee in Hear filed an objection to Siemens bid. Basis for objection is: 1) Less Cash than Demant and bid assumes right to bid unsecured claim; 2) Seeking Adjournment of Sale Hearing. While the objection has grounds, its unclear whether equity can do better than in a sale process. Clearly, on the face Demant bid is better for stakeholders than Siemens.
Equity Committee Appointed in HearUSA Bankruptcy Case [View instapost]
So the bid right now is $83 m. which leaves roughly $18 m. for common stock. The real question is does Seimens step forward, or someone else and does Hear sell northwards of $100 m. The stock seems agnostic to this idea. There's one week to go?
Why Horizon Lines Should Declare Bankruptcy [View article]
Excellent analysis of HRZ. Definitely looks like a bk. Won't be cheap. Seems like the new management team should be able to guide this ship into safe waters. There is a reason for being. We are buyers of claims.
YRC Worldwide (YRCW -22.9%) sinks after an SEC filing reveals that it may have to file for bankruptcy protection if it defaults on some debt. Creditors have not declared a default, the filing says, but they have the right to do so in light of the company’s failure to meet some terms of its commitments. [View news story]
Trucking companies do really poorly in bk. Let's see if Tepper et al. can save this one.
Madoff case needs a claims exchange [View instapost]
A Strategic Sale Won't Save Kodak [View article]
Why Horizon Lines Should Declare Bankruptcy [View article]
Horizon Lines, Inc. announced that it has completed a comprehensive refinancing of the company's entire capital structure. The new capital structure addresses the company's financial needs by providing adequate liquidity to fund continuing operations and the ability to achieve substantial additional debt reduction.
"We now have a new capital structure that eliminates the refinancing uncertainty faced by our company over the past several months and better positions us for the future," said Stephen H. Fraser, president and CEO. "We have put in place a solid financial foundation that affords us the opportunity to grow our business and significantly reduce debt over time."
The terms of the recapitalization, which results in a $652.8 million financial restructuring, consist of the following:
Certain holders of the 4.25% convertible senior notes due 2012 (the "2012 convertible notes") and certain other parties purchased $225 million of 11.00% first-lien secured notes. The notes mature in October 2016, and are callable at 101.5% of the aggregate principal plus accrued and unpaid interest in year one, and at par plus accrued and unpaid interest thereafter.
Certain holders of the 2012 convertible notes and certain other parties also purchased $100 million of second lien secured notes, maturing in October 2016. The second lien notes bear interest, payable semi-annually at a rate of 13.00% per annum if paid in cash, 14.00% per annum if paid 50% in cash and 50% in kind, and 15.00% per annum if paid in kind, at the company's option. The $100 million amount includes second lien notes that were issued in exchange for a $25 million bridge loan that was entered into in September 2011, with the remaining $75 million issued at par. The new second lien secured notes are non callable for two years. After that, they are callable at 106% of the aggregate principal plus accrued and unpaid interest in year three, at 103% plus accrued and unpaid interest in year four, and at par plus accrued and unpaid interest thereafter.
Additionally, the company and its subsidiaries entered into a new, $100 million, asset-based revolving credit facility arranged through Wells Fargo Capital Finance to provide liquidity for continuing operations. Availability under the ABL facility is based on a percentage of eligible accounts receivable, up to a maximum of $100 million. The ABL facility matures in October 2016, although the maturity will accelerate by 90 days if the first-lien notes and second-lien notes have not been repaid, refinanced or defeased by such date. The ABL facility bears interest at a floating rate based on a specified spread over LIBOR. The initial rate will be LIBOR plus 3.25%. No amounts were drawn at the closing date, although there were $19.1 million of outstanding letters of credit under the ABL facility, with $67.1 million available for borrowing.
The company also completed its exchange offer and consent solicitation, in which $178.8 million of new 6.00% Series A convertible senior secured notes due April 15, 2017, $99.3 million of new 6.00% Series B mandatorily convertible senior secured notes, and $49.7 million of common stock and warrants, issued at $1.00 par value, were exchanged for the $327.8 million of 2012 convertible notes that were validly tendered in the exchange offer. In total, 99.3% of the $330.0 million of 2012 convertible notes were validly tendered in the exchange offer. Interest on the new notes is payable semi-annually in cash. The Series A Notes are convertible at the option of the holders, and at the company's option under certain circumstances beginning on the one-year anniversary of their issuance, into shares of common stock or warrants, as described below. The Series B Notes are mandatorily convertible into shares of the company's common stock or warrants in two equal installments of approximately $49.7 million each on the three-month and nine-month anniversaries of the consummation of the exchange offer, subject to certain conditions, as described below.
"We greatly appreciate the support of our note holders, previous lender group and the new lenders to facilitate this comprehensive and complex refinancing in an orderly and timely manner," said Michael T. Avara, Executive Vice President and Chief Financial Officer. "We also are grateful to our teams of advisors from Kirkland & Ellis LLP and Moelis & Company for their expert advice, creativity and diligence through this arduous process. Our thanks further extends to Paul, Weiss, Rifkind, Wharton & Garrison LLP and Houlihan Lokey, who were the legal and financial advisors, respectively, to the holders of the 2012 convertible notes, for their important contributions."
Horizon Lines, Inc. is a domestic ocean shipping and integrated logistics company.
What Investors Must Know About A Kodak Bankruptcy [View article]
1. Patents-Comps to Nortel IP seems unwarranted as different type of IP. Furthermore, litigation around many of the patents.
2. Liquidation of other assets-Company has undertaken a slow liquidation for several years and probably is left with weaker yielding assets. Furthermore, EK know as one of the worst polluters in NYS so ENVIRONMENTAL RISKS are great. Remember, we're talking about chemicals here.
3. It's all about the burn. If EK burns alot of cash, and the process takes a long time, equity and maybe debt will be further eroded. Typically, with legacy companies like EK, restructurings drag on.
Siemens Affiliate Bids to Acquire HearUSA's Assets [View instapost]
Siemens Affiliate Bids to Acquire HearUSA's Assets [View instapost]
Siemens Affiliate Bids to Acquire HearUSA's Assets [View instapost]
Equity Committee Appointed in HearUSA Bankruptcy Case [View instapost]
Why Horizon Lines Should Declare Bankruptcy [View article]
YRC Worldwide (YRCW -22.9%) sinks after an SEC filing reveals that it may have to file for bankruptcy protection if it defaults on some debt. Creditors have not declared a default, the filing says, but they have the right to do so in light of the company’s failure to meet some terms of its commitments. [View news story]