ModSpace entered into a comprehensive financial restructuring agreement with its lenders, bondholders and equity sponsor. 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.

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

This transaction is supported by all 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.

According to documents filed in the U.S. Bankruptcy Court of Delaware, Bank of America will serve as administrative agent for the DIP facility, which will consist of an asset-based revolving credit facility and a term loan.

“This is a positive action for ModSpace. Through this, we will de-lever our balance sheet and provide an infusion of new capital upon which to grow. Our employees, customers and vendors can be assured that it will be business as usual and we will honor all of our commitments to them,” said President and CEO Charles Paquin.

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

Cleary Gottlieb Steen & Hamilton is acting as legal counsel for the company. Lazard Middle Market and Lazard Freres & Co. are acting as the company’s investment bankers, and Zolfo Cooper is the company’s financial advisor. Dechert is acting as legal counsel, and Moelis is acting as financial advisor to the ad hoc group of noteholders.

Berwyn, PA-based Modular Space is a U.S.-owned provider of office trailers, portable storage units and modular buildings for temporary or permanent space needs.