Light Tower Rentals and three affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the Southern District of Texas, lead case number 16-34284 (LTR Holdco). The Company, which provides natural gas generator rental services for drilling rigs, is represented by Patricia Tomasco of Jackson Walker.
On August 8, 2016, Light Tower Rentals entered into a restructuring support agreement (RSA) with certain holders of the Company’s debt and equity. The terms of the agreement provide for a substantial deleveraging of the Company’s balance sheet by converting approximately $330 million of its bond debt into $30 million of new bond debt and new common equity. The new common equity will be owned by the holders of the Company’s new and existing bond debt.
Concurrent with the petition, the Company also filed with the Court a Joint Prepackaged Plan of Reorganization and related Disclosure Statement. According to the Disclosure Statement, “The Debtors believe that LTR’s core strengths, the durability of its business model, including the experience of its executive management team, the strategic location of its assets, and its ability to pursue growth opportunities, will allow it to implement the balance-sheet restructuring contemplated by the RSA and the Plan and therefore ensure their long-term viability.”
The Disclosure Statement continues, “On the Effective Date, Reorganized LTR shall issue new secured notes, guaranteed by each of its subsidiaries (except for any immaterial subsidiaries, consistent with the LTR Indenture) and its parent company (which shall be a subsidiary of New LTR Holdings), in the aggregate principal amount of $30 million, (i) bearing interest at 10% per annum, payable in cash or in kind at the option of the Reorganized LTR for the period commencing on the Effective Date and ending on the third anniversary thereof, and payable solely in cash thereafter, (ii) maturing on the fifth anniversary of the Effective Date, (iii) being callable (a) prior to the second anniversary of the Effective Date at a price equal to 101% of the aggregate principal amount outstanding, (b) during the period commencing on the second anniversary of the Effective Date through the day prior to the third anniversary of the Effective Date at a price equal to 106.75% of the aggregate principal amount outstanding, (c) during the period commencing on the third anniversary of the Effective Date through the day prior to the fourth anniversary of the Effective Date at a price equal to 104.50% of the aggregate principal amount outstanding, and (d) at a price equal to 100% of the aggregate outstanding amount from the fourth anniversary of the Effective Date and thereafter, and (iv) containing terms and covenants substantially similar to those under the LTR Indenture, with such modifications acceptable to the Required Consenting Noteholders.”
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