The company’s disclosure statement was approved on April 12, and the bankruptcy court in Wilmington, Del., confirmed the company’s reorganization plan on May 30.
The company filed for Chapter 11 on June 27, 2011, with a pre-arranged plan that would have paid secured creditors in full, in cash, and exchanged the company’s unsecured debt for equity in the reorganized company. The company, however, was unable to obtain the exit financing needed to fund the plan.
Still, the company continued to seek financing for the plan through the latter part of 2011, but was unsuccessful and, finally, in January of this year the company circulated a new plan among creditors, which was ultimately filed in March.
Under the new plan, as amended, second-lien noteholders are to receive 100% of the company’s undiluted reorganized equity, along with $100 million of new second-lien take-back notes. Second-lien noteholders also agreed to backstop a new $80 million first-lien term loan facility, which carries an interest rate of 8% in year one, 11% in year two, and 12% in year three. The loan is callable in year two at 105% and in year three at 100%.
Holders of the company’s 8.625% unsecured notes, meanwhile, would receive warrants for up to 7% of fully diluted equity struck at an equity value of $100 million, and warrants for up to 15% of the new equity struck at an equity value of $150 million.
As also reported, Nebraska Book obtained a $75 million exit ABL arranged by Regions Bank, with an option to increase the revolver by an aggregate amount of $25 million, up to a maximum of $100 million, without lender approval, but subject to receipt of sufficient commitments from new or additional lenders. Pricing is on a three-level grid ranging from L+175 to L+225, based on levels of excess availability. – Alan Zimmerman