Prepackaged Plan Expected to Reduce Debt by More than
$400 Million
Secures Commitment of $206.7
Million in Debtor-in-Possession Financing
Company Voluntarily Commences Prepackaged Chapter 11
Proceedings in the U.S. Bankruptcy Court for the District of
Delaware to Implement
Restructuring
Operations Will Continue Without Interruption and With No
Expected Impact to Customers, Vendors or Employees
MORRISVILLE, N.C., June 15, 2020 /PRNewswire/ -- Pyxus
International, Inc. ("Pyxus" or "the Company") (NYSE: PYX), a
global value-added agricultural company, announced today that
it and its subsidiaries, Alliance One International, LLC, Alliance
One North America, LLC, Alliance One Specialty Products, LLC and
GSP Properties, LLC, filed voluntary petitions for relief under
Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court
for the District of Delaware as
part of a "prepackaged" Chapter 11 Case (the "Chapter 11
Cases").
In connection with the filing, the Company entered into a
Restructuring Support Agreement ("RSA") with noteholders holding
more than 92% in principal amount of the Company's first lien notes
and more than 67% in principal amount of its second lien notes. In
addition, the Company's receivables financing lenders and certain
key foreign lenders have granted waivers and amendments under their
respective facilities, demonstrating significant global financial
support for the Company.
Under the terms of the RSA, Pyxus' second lien noteholders will
convert approximately $635 million of
the Company's debt into equity or cash, and its first lien
noteholders will, among other things, extend the maturity date of
their existing notes by four years. To implement the financial
restructuring contemplated under the RSA, the Company commenced
solicitation of a prepackaged Chapter 11 Plan of Reorganization
(the "Prepack Plan") and thereafter filed for Chapter 11 to
restructure its debt and delever its balance sheet. The Prepack
Plan contemplates that all outstanding shares of Pyxus common stock
and rights to acquire Pyxus common stock will be cancelled and each
holder of outstanding Pyxus common stock will be entitled to
receive its ratable share of $1,000,000 in cash provided that such holder does
not opt out of the third-party releases contained in the Prepack
Plan or object to the Prepack Plan.
The Chapter 11 process does not include the Company's
international subsidiaries or affiliates and Pyxus anticipates
continuing to operate its worldwide operations in the ordinary
course during the proceeding as it restructures its balance sheet.
The terms of the restructuring contemplate paying, among others,
all vendors and foreign lenders, in full.
In addition, Pyxus has secured commitments for a $206.7 million Debtor-in-Possession financing
facility ("DIP Facility") from certain existing noteholders.
Proceeds from the DIP Facility will be used to refinance the
Company's existing asset-based revolver, for working capital and
general corporate purposes, and to pay expenses incurred in
connection with the Chapter 11 Cases. Subject to Court approval,
the DIP Facility, combined with the Company's projected cash flows,
are expected to provide liquidity to support its operations during
the restructuring process, allowing the Company to emerge with a
strengthened balance sheet to complement its operations and future
growth plans.
"This agreement with our noteholders represents a significant
milestone in the ongoing process to transform our business as we
continue to focus on driving long-term, sustainable growth and
greater efficiency," said Pieter
Sikkel, Pyxus' President and CEO. "We will continue to
provide our customers with the quality products and services they
are accustomed to without interruption and work with our business
partners throughout the Court-supervised process. We also expect
there will be no impact to vendors. As we look to quickly re-emerge
from this process, we expect to be a stronger company, better able
to execute on our long-term strategy and positioned for long-term
growth and success."
For additional information about Pyxus' restructuring, including
access to court filings and other documents related to the
Court-supervised process, please visit
https://cases.primeclerk.com/Pyxus/.
Simpson Thacher & Bartlett LLP is serving as legal counsel,
and Lazard and RPA Advisors are serving as financial advisors to
Pyxus.
About Pyxus International, Inc.
Pyxus
International, Inc. (NYSE: PYX) is a global agricultural company
with more than 145 years of experience delivering value-added
products and services to businesses, customers and consumers.
Driven by a united purpose—to transform people's lives, so that
together we can grow a better world—Pyxus International, its
subsidiaries and affiliates, are trusted providers of responsibly
sourced, independently verified, sustainable and traceable
agricultural and consumer-driven products and ingredients. For more
information, visit www.pyxus.com.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains "forward-looking
statements" as defined in the Private Securities Litigation Reform
Act of 1995. These statements are based on current expectations of
future events. Such statements include, but are not limited to,
statements about future financial and operating results, plans,
objectives, expectations and intentions and other statements that
are not historical facts. Such statements are based on the current
beliefs and expectations of management and are subject to
significant risks and uncertainties. If underlying assumptions
prove inaccurate or known or unknown risks or uncertainties
materialize, actual results may differ materially from those
currently anticipated, expected or projected. The following
factors, among others, could cause actual results to differ from
those expressed or implied by the forward-looking statements:
- risks and uncertainties relating to the Chapter 11 Cases,
including but not limited to: the Company's ability to obtain
Bankruptcy Court approval with respect to motions in the Chapter 11
Cases and approval of requisite stakeholders and confirmation by
the Bankruptcy Court of the Prepack Plan, the effects of the
Chapter 11 Cases on the Company and its various constituents, the
impact of Bankruptcy Court rulings in the Chapter 11 Cases, the
ultimate outcome of the Chapter 11 Cases in general, the length of
time the Company will operate under the Chapter 11 Cases, attendant
risks associated with restrictions on the Company's ability to
pursue its business strategies while the Chapter 11 Cases are
pending, risks associated with third-party motions in the Chapter
11 Cases, the potential adverse effects of the Chapter 11 Cases on
the Company's liquidity, the likelihood of the cancellation of the
Company's common stock in the Chapter 11 Cases, uncertainty
regarding the Company's ability to retain key personnel, whether
the Company's leaf tobacco customers, farmers and other suppliers
might lose confidence in the Company's ability to reorganize its
business successfully and may seek to establish alternative
commercial relationships, whether, as a result of the Chapter 11
Cases, foreign lenders that have provided short-term operating
credit lines to fund leaf tobacco operations at the local level may
lose confidence in the Company and cease to provide such funding,
and uncertainty and continuing risks associated with the Company's
ability to achieve its goals and continue as a going concern;
- risk and uncertainties related to the Company's leaf tobacco
operations, including changes in the timing of anticipated
shipments, changes in anticipated geographic product sourcing,
changes in relevant capital markets affecting the terms and
availability of short-term seasonal financing, political
instability, currency and interest rate fluctuations, shifts in the
global supply and demand position for tobacco products, changes in
tax laws and regulations or the interpretation of tax laws and
regulations, resolution of tax matters, adverse weather conditions,
the impact of disasters or other unusual events affecting
international commerce, and changes in costs incurred in supplying
products and related services;
- risks and uncertainties related to the COVID-19 pandemic,
including possible delays in shipments of leaf tobacco, including
from the closure or restricted activities at ports or other
channels, disruptions to the Company's operations or the operations
of suppliers and customers resulting from restrictions on the
ability of employees and others in the supply chain to travel and
work, border closures, determinations by the Company or shippers to
temporarily suspend operations in affected areas, whether the
Company's operations that have been classified as "essential" under
various governmental orders restricting business activities will
continue to be so classified or, even if so classified, whether
site-specific health and safety concerns related to COVID-19 might
otherwise require operations at any of the Company's facilities to
be halted for some period of time, negative consumer purchasing
behavior with respect to our products or the products of our leaf
tobacco customers during periods of government mandates restricting
activities imposed in response to the COVID-19 pandemic, and the
extent to which the impact of the COVID-19 pandemic on the
Company's operations and the demand for its products may not
coincide with impacts experienced in the
United States due to the international scope of the
Company's operations, including in emerging markets that may have
only recently experienced COVID-19 outbreaks; and
- risks and uncertainties related to the Company's new business
lines, including with respect to the impact of regulation
associated with new business lines, including the risk of obtaining
anticipated regulatory approvals for cannabis products in
Canada and for nicotine e-liquids
products in the United States,
uncertainties regarding the regulation of the production and
distribution of industrial hemp products and continued compliance
with applicable regulatory requirements, uncertainties with respect
to the development of the industries and markets of the new
business lines, consumer acceptance of products offered by the new
business lines, uncertainties with respect to the timing and extent
of geographic and product-line expansion, the impact of increasing
competition in the new business lines, uncertainties regarding the
viability of facilities expansions, the possibility of delays in
the completion of facilities expansions and uncertainties regarding
the potential production yields of new or expanded facilities, as
well as the progress of legalization of cannabis for medicinal and
adult recreational uses in other jurisdictions.
A further list and description of these risks, uncertainties and
other factors can be found in the "Risk Factors" section of the
Company's annual report on Form 10-K for the fiscal year ended
March 31, 2019, in Part II, Item 1A
"Risk Factors" in the Company's Quarterly Reports on Form 10-Q for
the periods ended June 30, 2019,
September 30, 2019 and December 31, 2019 and in the Company's other
filings with the Securities and Exchange Commission (the "SEC")
which are available at the SEC's Internet site
(http://www.sec.gov). Pyxus does not undertake to update any
forward-looking statements made in this press release to reflect
any change in management's expectations or any change in the
assumptions or circumstances on which such statements are based,
except as required by law.
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SOURCE Pyxus International, Inc.