Appvion filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Court for the District of Delaware to facilitate a balance sheet restructuring and better position the business for long-term growth and success.
The company expects to continue operations as usual and has obtained a commitment for $85 million in new debtor-in-possession financing from a group of its first lien lenders. According to first day filings, Wilmington Trust is serving as administrative agent for the DIP financing, and PJT Partners is sole lead arranger.
Subject to bankruptcy court approval, this DIP financing, combined with cash generated by the company, is expected to provide more than adequate liquidity to support ongoing operations during the process.
“We thoroughly explored various alternatives to address our debt and have been engaged in constructive discussions with our lenders regarding sponsorship of a plan to [deliver] the company and enhance our liquidity,” said Kevin Gilligan, Appvion CEO. “While those discussions are active and continuing, we determined that pursuing a restructuring through Chapter 11 is the best path forward for Appvion and our stakeholders. We believe this process will result in a sustainable capital structure for our business.”
The company will work closely with its customers and vendors to ensure that ongoing obligations are met and that production and delivery are uninterrupted.
DLA Piper is serving as legal counsel to Appvion, Guggenheim is serving as the company’s investment banker and Alan Holtz of AlixPartners is serving as the company’s chief restructuring officer.
Headquartered in Appleton, WI, Appvion operates coating and converting plants there and in West Carrollton, OH, and a pulp and paper mill in Roaring Spring, PA.