PaperWorks Industries and certain of its affiliates have entered into a restructuring support agreement 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 Company's funded indebtedness, through a repayment of the Company's 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 Company's 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 the Company's 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 Company expects to conclude the restructuring process by the end of March 2018.
The Company is represented by Kirkland & Ellis LLP as legal counsel, Houlihan Lokey Capital, Inc. as investment banker, and Zolfo Cooper, LLC as financial advisor. The ad hoc group of noteholders is represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel and PJT Partners, Inc. as investment banker.
PaperWorks Industries, Inc. is a leading, integrated North American full-service provider of recycled paperboard and specialized folding cartons for packaging applications serving over 700 clients from seven strategic locations.
The Company is committed to the highest sustainable forestry and procurement standards. Product certifications include the Forest Stewardship Council and the 100% Recycled Paperboard Alliance.