A. M. Castle concluded a series of strategic developments designed to position the business for continued transformation.
Highlights of the transaction are:
- W.B. & Co. and affiliates, the company’s largest and oldest shareholder group, increased ownership in Castle by purchasing Raging Capital’s entire equity ownership of 4,630,795 shares, bringing its equity ownership interest to approximately 35% of the company’s common stock.
- In conjunction with the sale of its entire equity ownership, Raging Capital and the company reached a new settlement agreement, which includes the resignation of Raging Capital’s representatives Kenneth Traub and Richard Burger from the company’s board, effective as of November 4, 2016, and also includes stand-still provisions limiting Raging Capital’s future actions relating to the company.
- The company entered into commitment letters providing for new $100 million secured term credit facilities with a syndicate of lenders, which upon close are intended to improve the company’s liquidity position and working capital profile.
According to a related 8-K filing, Highbridge Capital Management, Corre Partners Management, Whitebox Credit Partners and WFF Cayman II closed a new $100 million secured credit facility. The funds will be used to repay company’s existing revolving loan and security agreement with Wells Fargo as lender and administrative agent. The company’s new credit facilities will take the form of senior-secured, first-lien, term loan credit facilities in an aggregate principal amount of up to $100 million. In connection therewith, commitments pursuant the existing credit agreement will be terminated and liens granted to the collateral agent will be released in full.