AFGlobal first lien lender group receives 95.5 percent of equity as debtor emerges pursuant to prepackaged plan of reorganization
Client(s) AMF Ad Hoc First Lien Term Loan Group
Jones Day represented a group of first lien term loan lenders of AFGlobal Corporation (f/k/a Ameriforge Group), an oil and gas OEM specializing in technology, products and services with fully-integrated manufacturing capabilities to clients around the world, in its prepackaged chapter 11 cases. The term loan lender group also provided AFGlobal with a new money debtor-in-possession financing facility ("DIP") of approximately $70 million (plus certain letter of credit obligations) to fund the chapter 11 cases and agreed to "backstop" the company's exit financing facility by converting their DIP claims in the event the exit facility was less than fully subscribed.
On May 19, 2017 -- only 19 days after the company filed for bankruptcy -- Judge Jones of the U.S. Bankruptcy Court for the Southern District of Texas confirmed the company's prepackaged chapter 11 plan of reorganization after a largely uncontested confirmation hearing. The Plan was supported by holders of approximately 97 percent in amount of first lien claims and approximately 87 percent in amount of second lien claims. Not a single rejecting vote was received and not a single party with an economic interest in the case filed an objection to the Plan.
Pursuant to the Plan, first lien lenders agreed to receive 95.5 percent of the equity in the reorganized company in exchange for their approximately $608.3 million prepetition first lien secured claims. Second lien lenders agreed to receive 4.5 percent of the equity in the reorganized company and new warrants in exchange for their approximately $143.3 million prepetition second lien secured claims. In addition, the debtor-in-possession facility, which was used to finance the bankruptcy cases, was converted or "rolled" into first lien exit loans on the effective date.
The Plan went effective on April 14, 2017 upon the occurrence of the conditions precedent to effectiveness of the Plan, including execution and closing of the first lien exit facility that was provided by the term loan group represented by Jones Day, an exit ABL credit facility and certain other agreements necessary for closing.