UTEX Industries entered into a restructuring support agreement with the majority of its lenders on the terms of a comprehensive prepackaged restructuring. The balance sheet transaction will reduce UTEX’s funded debt by approximately $700 million and will provide UTEX with up to $42.5 million in new financing. UTEX expects to complete this process and consummate its prepackaged restructuring in a matter of weeks.
In connection with the financial restructuring, Houlihan Lokey is serving as financial advisor and investment banker, AlixPartners is serving as restructuring advisor, and Weil, Gotshal & Manges is serving as legal advisor to UTEX.
To implement this balance sheet restructuring, UTEX will commence a prepackaged plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. UTEX’s prepackaged plan is supported by more than 81.6% and 90.4% of UTEX first and second lien lenders, respectively. UTEX’s lenders also agreed to provide UTEX with debtor-in-possession financing and the consensual use of cash collateral to enable UTEX to operate its business in the ordinary course. UTEX’s prepackaged plan provides that all general unsecured creditors, including UTEX’s vendors and business partners, will remain unimpaired and will be paid in full in the ordinary course of business.
“After an extensive analysis of strategic and financial options for the company, and after months of negotiations, we are very pleased to have reached an agreement for a consensual restructuring with our secured lenders and other stakeholders,” Mike Balas, CEO of UTEX, said. “We believe that the restructuring contemplated by the agreement will provide us with the capital structure and liquidity to compete and grow in today’s business environment. I am grateful to our dedicated employees who have continued to work hard in this challenging business environment, and this transaction will position us and our partners for success in the years to come.”
UTEX will continue to operate its business in the normal course without disruption to its vendors, customers, employees or other partners, and, subject to customary approvals, will have access to liquidity to meet its obligations in the ordinary course during the restructuring. This includes funding employee wages and benefits, paying vendors and suppliers for all goods and services, and providing customers with products.
UTEX is a manufacturing business headquartered in Houston.
