American Commercial Lines has implemented a “pre-packaged” plan to recapitalize the business and significantly reduce the company’s debt under its previously announced Restructuring Support Agreement.
As part of the process, ACL has voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division.
ACL’s operations are continuing as normal. Upon emergence, ACL will continue to provide customers with competitive and reliable barge transportation services.
“Today we are moving forward with our pre-packaged plan to recapitalize the business, significantly reduce the company’s debt and materially increase our liquidity, which we believe will allow us to focus more of our resources on competing in the marketplace and investing in the business to support future growth. Because we already have the support of a substantial majority of our term loan lenders, we expect to move through this process very quickly,” said Mark Knoy, president and chief executive officer of American Commercial Lines.
Under the terms of the RSA, ACL will receive $200 million in new equity capital to support liquidity and investments in the business. In addition, the RSA provides for a reduction of funded debt by approximately $1 billion.
According to a court filing, Wells Fargo Capital Finance is administrative agent for the ABL DIP facility ad Courtland Capital Markets in administrative agent for the DIP term loan.
ACL has received a commitment for debtor-in-possession financing consisting of a $640 million asset-based loan and a $50 million term loan from certain of its existing lenders. Upon court approval, the new financing and cash generated from the company’s ongoing operations will be used to pay off ACL’s existing ABL and to support the business during the court-supervised process.
Under terms of the pre-packaged plan, which is subject to Court approval, general unsecured pre-petition claims will be paid in full in the ordinary course.
Milbank is serving as the company’s legal counsel, Greenhill is serving as its financial advisor and Alvarez & Marsal is serving as restructuring advisor.