Pace Industries announced that it has reached an agreement with its senior secured lenders on the terms of a comprehensive financial restructuring plan, which will deleverage the company's balance sheet.
This agreement has support from 100% of the holders of its senior secured notes as well as its revolving credit facility lenders.
Upon implementation, this agreement will give the company the financial foundation necessary to resume normal-course operations following the COVID-19 outbreak, realize the full benefit of its cost-savings initiatives and strategic investments recently executed, and continue to serve its customers as a leading fully-integrated provider of die cast aluminum, magnesium and zinc components.
To effectuate the plan and facilitate these important changes to the company's capital structure, the company and its U.S.
subsidiaries have initiated a voluntary prepackaged Chapter 11 process in the U.S.
Bankruptcy Court for the District of Delaware.
The company's operations in Mexico are unaffected by the filings, although they will benefit long-term from the actions the parent company is taking to strengthen its financial position.
The company's senior secured noteholders, along with its existing revolving credit lenders, will provide commitments for up to $175 million in debtor-in-possession financing to help ensure that the company can meet its commitments during the process.
Under the terms of the proposed prepackaged plan, the company will convert its existing senior secured notes into 100% of the equity in the reorganized company.
As a result of its noteholder and lender support, the company expects to complete the process in the second quarter of 2020 – emerging as a financially stronger company that is well-positioned to succeed in the post-COVID-19 environment.
The company has filed customary motions that will allow it to maintain employee wage and benefit programs, honor customer warranties as usual and continue to pay suppliers.
Although the motions remain subject to Court approval, the company expects that all trade creditors, employees, sales agents and unsecured creditors will be paid in full and on time in the normal course of business.
Additionally, the company will maintain all of its current standards for safety, quality and corporate citizenship both during and after the Chapter 11 process. ■