A. M. CASTLE & CO. (OTCMKTS:CASL) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 – Entry into a Material Definitive Agreement
New ABL Facility Commitment Letter
On June 2, 2017, A.M. Castle Co. (the Company) entered into a
commitment letter (including the memorandum of terms and
conditions attached thereto, the New ABL Facility Commitment
Letter) with PNC Bank, National Association (PNC). The New ABL
Facility Commitment Letter contemplates a $125 million
senior-secured, revolving credit facility for the Company (the
“New ABL Facility”), to be entered into upon the effective date
of the Companys previously announced pre-packaged chapter 11 plan
of reorganization (the Plan). Under the New ABL Facility
Commitment Letter, PNC has agreed to act as Agent, Lead Arranger
and Sole Book Runner of the New ABL Facility. The New ABL
Facility Commitment Letter sets forth certain of the anticipated
terms and conditions of the New ABL Facility. Consummation of the
New ABL Facility will be subject to the completion of definitive
documentation, the satisfaction of certain conditions, including
bankruptcy court approval thereof, and the payment by the Company
of required fees and expenses.
commitment letter (including the memorandum of terms and
conditions attached thereto, the New ABL Facility Commitment
Letter) with PNC Bank, National Association (PNC). The New ABL
Facility Commitment Letter contemplates a $125 million
senior-secured, revolving credit facility for the Company (the
“New ABL Facility”), to be entered into upon the effective date
of the Companys previously announced pre-packaged chapter 11 plan
of reorganization (the Plan). Under the New ABL Facility
Commitment Letter, PNC has agreed to act as Agent, Lead Arranger
and Sole Book Runner of the New ABL Facility. The New ABL
Facility Commitment Letter sets forth certain of the anticipated
terms and conditions of the New ABL Facility. Consummation of the
New ABL Facility will be subject to the completion of definitive
documentation, the satisfaction of certain conditions, including
bankruptcy court approval thereof, and the payment by the Company
of required fees and expenses.
The proceeds of the New ABL Facility, upon closing, would be used
to (a) refinance certain existing secured debt of the Company and
its subsidiaries, including debt under a DIP Facility (as defined
below in this Current Report on Form 8-K), (b) pay fees and
expenses related to this transaction, (c) satisfy ongoing capital
expenditures, and (d) provide for the ongoing growth and working
capital needs of the Company and certain of its subsidiaries.
to (a) refinance certain existing secured debt of the Company and
its subsidiaries, including debt under a DIP Facility (as defined
below in this Current Report on Form 8-K), (b) pay fees and
expenses related to this transaction, (c) satisfy ongoing capital
expenditures, and (d) provide for the ongoing growth and working
capital needs of the Company and certain of its subsidiaries.
Interest on New ABL Facility indebtedness is expected to accrue
based on the applicable LIBOR-based rate, as set forth in the New
ABL Facility Commitment Letter. The obligations of the Company
and its existing and future subsidiaries are, subject to certain
conditions, to be secured by a first-priority perfected security
interest in all or substantially all of their respective assets
and the Companys equity interests in its subsidiaries.
based on the applicable LIBOR-based rate, as set forth in the New
ABL Facility Commitment Letter. The obligations of the Company
and its existing and future subsidiaries are, subject to certain
conditions, to be secured by a first-priority perfected security
interest in all or substantially all of their respective assets
and the Companys equity interests in its subsidiaries.
Under the New ABL Facility Commitment Letter, and in
consideration for PNCs commitment, the Company has agreed to pay
PNC a customary deposit for reasonable costs and expenses that
may be incurred by PNC in connection with the transactions
contemplated by the New ABL Facility Commitment Letter, which
deposit is subject to reduction on a dollar-for-dollar basis to
reflect a credit for the deposit to be paid by the Company to PNC
in connection with the DIP Facility, and further subject to
refund (less costs incurred) if the New ABL Facility does not
close. The Company is required to obtain an order of the
bankruptcy court approving the Companys reimbursement and
indemnification obligations under the New ABL Facility Commitment
Letter and to work exclusively with PNC to consummate the New ABL
Facility until the New ABL Facility Commitment Letter expires.
consideration for PNCs commitment, the Company has agreed to pay
PNC a customary deposit for reasonable costs and expenses that
may be incurred by PNC in connection with the transactions
contemplated by the New ABL Facility Commitment Letter, which
deposit is subject to reduction on a dollar-for-dollar basis to
reflect a credit for the deposit to be paid by the Company to PNC
in connection with the DIP Facility, and further subject to
refund (less costs incurred) if the New ABL Facility does not
close. The Company is required to obtain an order of the
bankruptcy court approving the Companys reimbursement and
indemnification obligations under the New ABL Facility Commitment
Letter and to work exclusively with PNC to consummate the New ABL
Facility until the New ABL Facility Commitment Letter expires.
The New ABL Facility Commitment Letter expires on the earlier of
(a) July 31, 2017, if substantially final definitive
documentation has not been negotiated between the Company and PNC
on or prior to such date (unless otherwise extended in writing by
the Borrower and PNC, each in their sole discretion); (b) August
31, 2017 (or such later date as may be agreed in writing by
Borrower and PNC, each in their sole discretion), if the New ABL
Facility has not closed on or before such date; or (c) upon the
closing of the New ABL Facility.
(a) July 31, 2017, if substantially final definitive
documentation has not been negotiated between the Company and PNC
on or prior to such date (unless otherwise extended in writing by
the Borrower and PNC, each in their sole discretion); (b) August
31, 2017 (or such later date as may be agreed in writing by
Borrower and PNC, each in their sole discretion), if the New ABL
Facility has not closed on or before such date; or (c) upon the
closing of the New ABL Facility.
DIP Facility Commitment Letter
On June 2, 2017, the Company entered into a commitment letter
(including the memorandum of terms and conditions attached
thereto, the DIP Facility Commitment Letter) with PNC. The DIP
Facility Commitment Letter contemplates an $85 million
senior-secured, revolving debtor-in-possession credit facility
(the DIP Facility), the proceeds of which would be used to repay
certain existing debt and provide additional working capital to
enable the Company to implement the restructuring of the Companys
debt and equity under the Plan. Under the DIP Facility Commitment
Letter, PNC has agreed to act as Agent, Lead Arranger and Sole
Book Runner of the DIP Facility. The DIP Facility Commitment
Letter sets forth certain of the anticipated terms and conditions
of the DIP Facility. Consummation of the DIP ABL Facility will be
subject to the completion of definitive documentation, the
satisfaction of certain conditions, including bankruptcy court
approval thereof, and the payment by the Company of required fees
and expenses.
(including the memorandum of terms and conditions attached
thereto, the DIP Facility Commitment Letter) with PNC. The DIP
Facility Commitment Letter contemplates an $85 million
senior-secured, revolving debtor-in-possession credit facility
(the DIP Facility), the proceeds of which would be used to repay
certain existing debt and provide additional working capital to
enable the Company to implement the restructuring of the Companys
debt and equity under the Plan. Under the DIP Facility Commitment
Letter, PNC has agreed to act as Agent, Lead Arranger and Sole
Book Runner of the DIP Facility. The DIP Facility Commitment
Letter sets forth certain of the anticipated terms and conditions
of the DIP Facility. Consummation of the DIP ABL Facility will be
subject to the completion of definitive documentation, the
satisfaction of certain conditions, including bankruptcy court
approval thereof, and the payment by the Company of required fees
and expenses.
The purpose of the DIP Facility is to (a) refinance certain
existing first lien loan obligations of the Company, (b) pay fees
and expenses related to the DIP Facility, and (c) provide for
on-going working capital needs to, among other things, pay for
administrative expenses incurred by the Company, subject to an
approved budget.
existing first lien loan obligations of the Company, (b) pay fees
and expenses related to the DIP Facility, and (c) provide for
on-going working capital needs to, among other things, pay for
administrative expenses incurred by the Company, subject to an
approved budget.
Interest on DIP Facility indebtedness is expected to accrue based
on the applicable LIBOR-based rate, as set forth in the DIP
Facility Commitment Letter. The obligations of the Company and
its debtor subsidiaries are to be (i) entitled to super-priority
administrative expense claim status to the Bankruptcy Code with
priority over any administrative expenses of a kind specified in
the Bankruptcy Code, subject to a carve-out for certain specified
bankruptcy-related fees and expenses; and (ii) secured, to the
Bankruptcy Code, by a first-priority perfected security interest
and lien on all or substantially all of the Companys and its
debtor subsidiaries>respective assets and the Companys equity
interests in its subsidiaries, subject to such carve-out.
on the applicable LIBOR-based rate, as set forth in the DIP
Facility Commitment Letter. The obligations of the Company and
its debtor subsidiaries are to be (i) entitled to super-priority
administrative expense claim status to the Bankruptcy Code with
priority over any administrative expenses of a kind specified in
the Bankruptcy Code, subject to a carve-out for certain specified
bankruptcy-related fees and expenses; and (ii) secured, to the
Bankruptcy Code, by a first-priority perfected security interest
and lien on all or substantially all of the Companys and its
debtor subsidiaries>respective assets and the Companys equity
interests in its subsidiaries, subject to such carve-out.
Under the DIP Facility Commitment Letter, and in consideration
for PNCs commitment, the Company has agreed to pay PNC a
customary deposit for reasonable costs and expenses that may be
incurred by PNC in connection with the transactions contemplated
by the DIP Facility Commitment Letter, subject to refund (less
costs incurred) if the DIP Facility does not close.
for PNCs commitment, the Company has agreed to pay PNC a
customary deposit for reasonable costs and expenses that may be
incurred by PNC in connection with the transactions contemplated
by the DIP Facility Commitment Letter, subject to refund (less
costs incurred) if the DIP Facility does not close.
The DIP Facility Commitment Letter expires on the earlier of
(a) June 30, 2017 (or such later date as may be agreed in
writing by Borrower and PNC, each in its sole discretion) if
the DIP Facility has not closed on or before that date or (b)
upon the closing of the DIP Facility.
(a) June 30, 2017 (or such later date as may be agreed in
writing by Borrower and PNC, each in its sole discretion) if
the DIP Facility has not closed on or before that date or (b)
upon the closing of the DIP Facility.
Item 7.01 – Regulation FD Disclosure
On June 5, 2017, the Company issued a press release
announcing that it had entered into the New ABL Facility
Commitment Letter and the DIP Facility Commitment Letter, as
disclosed in Item 1.01 of this Current Report on Form 8-K. A
copy of the press release is attached to this Current Report
on Form 8-K as Exhibit 99.1 and is incorporated herein by
this reference.
announcing that it had entered into the New ABL Facility
Commitment Letter and the DIP Facility Commitment Letter, as
disclosed in Item 1.01 of this Current Report on Form 8-K. A
copy of the press release is attached to this Current Report
on Form 8-K as Exhibit 99.1 and is incorporated herein by
this reference.
The information included in this Form 8-K under Item 7.01 and
Exhibit 99.1 is being furnished and shall not be deemed filed
for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the Exchange Act), or otherwise subject to
liabilities of that Section, unless the Company specifically
states that the information is to be considered filed under
the Exchange Act or incorporates it by reference into a
filing under the Exchange Act or the Securities Act of 1933,
as amended.
Exhibit 99.1 is being furnished and shall not be deemed filed
for purposes of Section 18 of the Securities Exchange Act of
1934, as amended (the Exchange Act), or otherwise subject to
liabilities of that Section, unless the Company specifically
states that the information is to be considered filed under
the Exchange Act or incorporates it by reference into a
filing under the Exchange Act or the Securities Act of 1933,
as amended.
Cautionary Note Regarding Forward-Looking Statements
Information provided and statements contained in this
Current Report on Form 8-K or the Exhibits hereto are not
purely historical are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as
amended (Securities Act), Section 21E of the Securities
Exchange Act of 1934, as amended (Exchange Act), and the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements only speak as of the date of
this release and the Company assumes no obligation to
update the information included in this release. Such
forward-looking statements include information concerning
our possible or assumed future results of operations,
including descriptions of our business strategy and the
cost savings and other benefits that we expect to achieve
from our restructuring changes. These statements often
include words such as believe, expect, anticipate, intend,
predict, plan, “should,” or similar expressions. These
statements are not guarantees of performance or results,
and they involve risks, uncertainties, and assumptions.
Although we believe that these forward-looking statements
are based on reasonable assumptions, there are many factors
that could affect our actual financial results or results
of operations and could cause actual results to differ
materially from those in the forward-looking statements.
These factors include or relate to: our ability to timely
conclude definitive documentation for, and to satisfy all
conditions to the consummation of, the New ABL Facility or
the DIP Facility, as the case may be; our ability to obtain
sufficient acceptances in connection with our solicitation
of debt holder support; our ability to obtain the
bankruptcy courts approval with respect to motions or other
requests made in any necessary chapter 11 case, including
approvals of the DIP Facility and/or the New ABL Facility;
our ability to maintain strategic control as
debtor-in-possession; the availability of the Bankruptcy
Court for hearings on our motions, which may affect the
timing of any required approvals and our emergence from any
necessary chapter 11 case; our ability to confirm and
consummate a chapter 11 plan of reorganization in any
necessary chapter 11 case; the effects of the filing of a
chapter 11 case on our business and the interests of
various constituents; the bankruptcy courts rulings in any
necessary chapter 11 case, as well the outcome of any such
case in general; the length of time that we will operate
under chapter 11 protection and the continued availability
of operating capital during the pendency of any necessary
chapter 11 case; risks associated with third party motions
or objections in any necessary chapter 11 cases, which may
interfere with our ability to confirm and consummate a
chapter 11 plan of reorganization; the potential adverse
effects of any necessary chapter 11 case on our liquidity
or results of operations; our ability to execute the
Companys business and financial reorganization plan; and
increased advisory costs to execute our reorganization.
Other factors include our ability to effectively manage our
operational initiatives and restructuring activities, the
impact of volatility of metals prices, the cyclical and
seasonal aspects of our business, our ability to
effectively manage inventory levels, our ability to
successfully complete the remaining steps in our strategic
refinancing process, and the impact of our substantial
level of indebtedness, as well as including those risk
factors identified in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2016, our Current Report
on Form 8-K filed April 7, 2017, and our Quarterly Report
on Form 10-Q for the first quarter ended March 31, 2017,
filed May 15, 2017. All future written and oral
forward-looking statements by us or persons acting on our
behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to above.
Except as required by the federal securities laws, we do
not have any obligations or intention to release publicly
any revisions to any forward-looking statements to reflect
events or circumstances in the future, to reflect the
occurrence of unanticipated events or for any other reason.
Current Report on Form 8-K or the Exhibits hereto are not
purely historical are forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as
amended (Securities Act), Section 21E of the Securities
Exchange Act of 1934, as amended (Exchange Act), and the
Private Securities Litigation Reform Act of 1995. Such
forward-looking statements only speak as of the date of
this release and the Company assumes no obligation to
update the information included in this release. Such
forward-looking statements include information concerning
our possible or assumed future results of operations,
including descriptions of our business strategy and the
cost savings and other benefits that we expect to achieve
from our restructuring changes. These statements often
include words such as believe, expect, anticipate, intend,
predict, plan, “should,” or similar expressions. These
statements are not guarantees of performance or results,
and they involve risks, uncertainties, and assumptions.
Although we believe that these forward-looking statements
are based on reasonable assumptions, there are many factors
that could affect our actual financial results or results
of operations and could cause actual results to differ
materially from those in the forward-looking statements.
These factors include or relate to: our ability to timely
conclude definitive documentation for, and to satisfy all
conditions to the consummation of, the New ABL Facility or
the DIP Facility, as the case may be; our ability to obtain
sufficient acceptances in connection with our solicitation
of debt holder support; our ability to obtain the
bankruptcy courts approval with respect to motions or other
requests made in any necessary chapter 11 case, including
approvals of the DIP Facility and/or the New ABL Facility;
our ability to maintain strategic control as
debtor-in-possession; the availability of the Bankruptcy
Court for hearings on our motions, which may affect the
timing of any required approvals and our emergence from any
necessary chapter 11 case; our ability to confirm and
consummate a chapter 11 plan of reorganization in any
necessary chapter 11 case; the effects of the filing of a
chapter 11 case on our business and the interests of
various constituents; the bankruptcy courts rulings in any
necessary chapter 11 case, as well the outcome of any such
case in general; the length of time that we will operate
under chapter 11 protection and the continued availability
of operating capital during the pendency of any necessary
chapter 11 case; risks associated with third party motions
or objections in any necessary chapter 11 cases, which may
interfere with our ability to confirm and consummate a
chapter 11 plan of reorganization; the potential adverse
effects of any necessary chapter 11 case on our liquidity
or results of operations; our ability to execute the
Companys business and financial reorganization plan; and
increased advisory costs to execute our reorganization.
Other factors include our ability to effectively manage our
operational initiatives and restructuring activities, the
impact of volatility of metals prices, the cyclical and
seasonal aspects of our business, our ability to
effectively manage inventory levels, our ability to
successfully complete the remaining steps in our strategic
refinancing process, and the impact of our substantial
level of indebtedness, as well as including those risk
factors identified in our Annual Report on Form 10-K for
the fiscal year ended December 31, 2016, our Current Report
on Form 8-K filed April 7, 2017, and our Quarterly Report
on Form 10-Q for the first quarter ended March 31, 2017,
filed May 15, 2017. All future written and oral
forward-looking statements by us or persons acting on our
behalf are expressly qualified in their entirety by the
cautionary statements contained or referred to above.
Except as required by the federal securities laws, we do
not have any obligations or intention to release publicly
any revisions to any forward-looking statements to reflect
events or circumstances in the future, to reflect the
occurrence of unanticipated events or for any other reason.
Item 9.01 – Financial Statements and Exhibits
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Exhibit Number
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Description
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99.1
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Press release dated June 5, 2017
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About A. M. CASTLE & CO. (OTCMKTS:CASL)
A. M. Castle & Co. is a specialty metals distribution company. The Company operates through two segments: Metal and Plastics. In its Metals segment, the Company focuses on distributing engineered specialty grades and alloys of metals, as well as providing specialized processing services. Its products include alloy, aluminum, nickel, stainless steel, carbon and titanium. Inventories of these products assume various forms, such as plate, sheet, extrusions, round bar, hexagon bar, square and flat bar, tubing and coil. The Company’s Plastics segment includes its subsidiary, Total Plastics, Inc. (TPI). The Plastics segment stocks and distributes a range of plastics in forms that include plate, rod, tube, clear sheet, tape, gaskets and fittings. Processing activities within this segment include cut-to-length, cut-to-shape, bending and forming according to customer specifications. The Company distributes and performs processing on both metals and plastics.