Lucky Bucks, a class B coin operated amusement machine (COAM) operator in Georgia, and its parent, Lucky Bucks HoldCo, completed a recapitalization transaction with the support of its secured lenders holding more than 86% of its secured debt. The recapitalization transaction will de-lever Lucky Bucks’ balance sheet and enhance its liquidity.
“The recapitalization transaction announced today will strengthen Lucky Bucks’ financial foundation, enabling us to maintain our industry leadership across the Georgia COAM market,” James Boyden, director and executive vice president of corporate development of Lucky Bucks, said. “We are confident in our ability to continue generating strong revenue for our partners as we take decisive steps to position our business for the future. During our recapitalization transaction, we expect there will be no disruption for our valued partners, employees, customers, vendors, or end-consumers.”
Secured lenders holding more than 86% of Lucky Bucks’ secured debt entered into a restructuring support agreement (RSA), evidencing support for the recapitalization transaction, including the agreement to equitize substantially all of Lucky Bucks’ secured debt and provide up to $43 million of new capital in the form of new first lien debt. The recapitalization transaction, which remains subject to court and regulatory approval, will reduce Lucky Bucks’ total secured debt by more than $500 million and enhance its liquidity.
To effectuate the recapitalization transaction, Lucky Bucks commenced voluntary prepackaged Chapter 11 cases in the U.S. Bankruptcy Court for the District of Delaware.
Lucky Bucks expects to move swiftly through its Chapter 11 cases to implement the recapitalization transaction in accordance with the RSA. Additionally, Lucky Bucks’ secured lenders agreed to provide $82 million in debtor-in-possession financing to fund Lucky Bucks’ capital needs during the Chapter 11 cases.
To facilitate a smooth transition into chapter 11, Lucky Bucks filed customary first day motions with the court, which are expected to be approved in short order. These motions include requests to pay all of Lucky Bucks’ general unsecured creditors in full, pay wages and benefits, and ensure the continuation of insurance, cash management systems and other business operations without interruption.
Milbank and Richards, Layton & Finger are serving as legal counsel, Evercore is serving as investment banker and M3 Partners is serving as financial advisor to Lucky Bucks. C Street Advisory Group is serving as strategy and communications advisor to Lucky Bucks.
Akin Gump Strauss Hauer & Feld and Cole Schotz are serving as legal counsel, Greenhill & Co. is serving as financial advisor and OnMessage Public Strategy is serving as the communications advisor to the ad hoc group of lenders holding term loan secured debt of Lucky Bucks. Latham & Watkins is serving as legal counsel to certain other lenders holding secured debt of Lucky Bucks.
