TNT Announces Agreement on Definitive Plan to Strengthen Bal
HOUSTON, Aug. 4, 2020 /PRNewswire/ -- FR TNT Holdings LLC and certain of its affiliates ("TNT" or the "Company") announced today that they have entered into a restructuring support agreement (the "RSA") with holders of more than 73% in principal amount of the Company's first lien secured loans and 75% in principal amount of its second lien secured loans, along with certain other supporting parties, to execute a transaction that will de-lever and financially strengthen the Company. Through the transaction, TNT will recapitalize and gain new liquidity in the form of a new $225 million term loan provided by the Company's first lien lenders. All operations will continue as usual without interruption. TNT's executive leadership team, which remains focused on the Company's operational performance, is expected to remain in place.
The Company is seeking to implement the transaction through a debt-for-equity exchange (the "Exchange"), which the lenders party to the RSA have agreed to accept. All the Company's first lien and second lien lenders will be solicited for the Exchange. The Exchange will only be consummated with the participation of 100% of the first lien and second lien lenders.
Simultaneously with the solicitation of the Exchange, TNT will also solicit votes on a prepackaged plan of reorganization (the "Prepackaged Plan") through cases under chapter 11 of the United States Bankruptcy Code, which will be commenced in August 2020 in the event the Company is unable to achieve 100% support for the Exchange. This dual-track approach, with significant lender support, will enable TNT to swiftly and definitively recapitalize its balance sheet with no impact to the majority of the Company's stakeholders. All parties to the RSA have already agreed to support the Prepackaged Plan, the terms of which are substantially the same as the Exchange and similarly provide for operations to continue as usual without interruption, with employees, suppliers, vendors, contract counterparties and other trade creditors to be paid in full in the ordinary course. The Company has secured commitments from certain of its first lien lenders for an additional $45 million debtor-in-possession financing, which, in addition to TNT's normal operating cash flows, will help fund the process and ensure the Company is able to operate as usual during the chapter 11 proceedings, if the transaction is implemented through a Prepackaged Plan.
"This restructuring is a positive outcome that will bolster TNT's financial strength and support our operations for the future. We are grateful to the lead members of our term loan group for working closely with us to prepare the consensual transaction and for the confidence demonstrated by their support. This consensual transaction will position TNT on firm financial footing with a healthier balance sheet. TNT will continue to operate seamlessly with an unwavering focus on safety and customer experience and no impact to our employees, customers and vendors," said Michael Appling Jr., Chief Executive Officer of TNT. "We are looking forward to working with the new ownership group to continue as North America's leader in providing safe, reliable lifting services as we grow alongside our customers."
Solicitation of the Exchange and the Prepackaged Plan is expected to commence imminently.
Through the transaction, the Company's first lien lenders will receive $100 million in exit term loans and 97% of the equity in reorganized TNT (subject to dilution). The Company's second lien lenders will receive the remaining equity in reorganized TNT and warrants that may be exercised for up to 5% of the equity in reorganized TNT (subject to dilution by a management incentive plan). All existing secured loans will be retired.
TNT is represented by Simpson Thacher & Bartlett LLP and Young Conaway Stargatt & Taylor, LLP, as legal co-counsels, Miller Buckfire & Co., LLC and Stifel, Nicolaus & Co., Inc., as financial advisor and investment banker, and FTI Consulting, Inc. as financial advisor. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities.
TNT is a crane services platform that provides operated and maintained ("O&M") crane services and comprehensive lifting services to a broad customer base across multiple sites, with a diversified end market exposure. As a provider of O&M services, the Company supplies its customers with highly skilled operators, technical expertise and project engineering and design in connection with its lifting services.
SOURCE FR TNT Holdings LLC