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Modular Space files for bankruptcy in U.S. and Canada

Staff Writer |
Modular Space Corporation has entered into a comprehensive financial restructuring agreement with its lenders, bondholders and equity sponsor.

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The restructuring will eliminate approximately $400 million of debt from the company’s balance sheet, provide $90 million of new equity capital from the bondholders via a rights offering and include a new $719 million credit facility to be provided by the existing asset based lenders.

This transaction is supported by all of the lenders, approximately 78% of the holders of the company’s 10.25% senior secured second lien notes due 2019, and the primary equity holder.

To implement the restructuring, the company and certain of its affiliates have filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy Code in the District of Delaware and, one affiliate has initiated a complementary, ancillary proceeding in Canada under the Companies’ Creditors Arrangement Act (CCAA), all to pursue a prepackaged plan of reorganization.

The company has received debtor in possession financing commitments from its existing lenders that will fund the operations during the Chapter 11 and CCA filings.

The company anticipates that the restructuring will be concluded by the end of February.

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