MRC Global has postponed its current efforts to refinance its term loan B, which matures in September 2024. An affiliate of Cornell Capital, the sole holder of MRC Global’s Series A 6.5% of convertible perpetual preferred stock, filed a lawsuit against MRC Global in the Delaware Court of Chancery to prevent MRC Global from moving forward with the previously announced refinancing of its senior secured term loan B.
MRC Global made the following statement:
“MRC Global sought to refinance its term loan B long before its maturity to take advantage of relatively favorable market conditions. Cornell Capital’s lawsuit seeks to prevent this refinancing by claiming that Cornell Capital has a right to consent to the terms of the refinancing transaction. Although we do not believe this is the case, the lawsuit has complicated the execution of the refinancing on favorable terms. Therefore, we have determined to postpone the present refinancing efforts before their conclusion.
“Even if MRC Global does not enter into a refinancing transaction in the future, MRC Global is confident that it could repay the term loan debt utilizing its asset-based lending (ABL) facility and cash generated from its operations. As of Dec. 31, 2022, the outstanding balance on the term loan B was $295 million and the company had availability under the ABL facility (which matures in September 2026) of $606 million, yielding total liquidity, including cash on hand, of $638 million. In addition, the company expects to generate $120 million in cash from operations during 2023, further improving its liquidity position. MRC Global’s term loan B does not mature until September 2024, providing the company with sufficient time to address the balance.”
