Jason Industries Commences Solicitation of Prepackaged Plan of Reorganization and Files Chapter 11
25 June 2020 - 6:05AM
Business Wire
Business Continues Delivering Leading
Solutions and Service to Customers Without Interruption
Jason Industries, Inc. (OTCQX: JASN) (“Jason” or the “Company”) today announced that it is taking two
important steps in its previously announced comprehensive
restructuring plan that, once completed, will deleverage the
Company’s balance sheet by $250 million. The Company expects its
day-to-day operations to continue without interruption and without
disruption to its employees, customers, suppliers and vendors.
Jason previously entered into a restructuring support agreement
(the “Agreement”) with holders of
approximately 87 percent of its first lien debt that, pursuant to
the terms of the Agreement, will ultimately delever the Company’s
balance sheet by $250 million and position Jason for future
success. All parties to the Agreement determined that the best way
to implement the terms of the Agreement is through a prepackaged
chapter 11 plan of reorganization (the “Plan”). Under the Plan, the Company’s first lien
lenders have consented to provide the Company with the use of cash
collateral to enable Jason to operate its business and minimize the
effect of the restructuring for the benefit of Jason’s
stakeholders.
To implement the Plan, today the Company commenced the formal
process of soliciting votes from lenders to accept or reject the
Plan. The Company already has support for the Plan from the vast
majority of its first lien lenders, and is soliciting additional
support from all of its lenders with the goal of obtaining full
consensus. The Company will continue to take those actions
necessary to complete its restructuring quickly and
efficiently.
Also today, the Company and certain of its direct and indirect
subsidiaries voluntarily filed petitions under Chapter 11 of the
United States Bankruptcy Code (“Chapter
11”) in the Southern District of New York (the “Chapter 11 Cases”). Under the Chapter 11 Cases,
the Company is seeking court approval to:
- Honor all customer programs
- Continue employee wages and benefits without interruption,
and
- Pay for goods and services provided to the Company.
“We have aggressively taken steps to simplify Jason and improve
the performance and financial strength of our company over the past
three years. While these actions have generated positive momentum,
we were not able to realize the full benefits of our plans due to
market cyclicality and disruptions brought on by the COVID-19
global pandemic,” stated Brian Kobylinski, Chief Executive
Officer.
“Directly addressing our balance sheet will enable Jason and its
operating businesses, Osborn and Milsco, to build upon our improved
operational foundation and reap the benefits of recent
cost-reductions and new business wins,” Mr. Kobylinski continued.
“We thank our lenders, employees, customers and suppliers for their
continued support throughout our process. We will emerge an even
stronger company with the opportunity to realize its full
potential.”
Moelis & Company LLC is acting as financial advisor,
Kirkland & Ellis LLP is acting as legal counsel, and
AlixPartners, LLP is acting as restructuring advisor to the Company
in connection with the restructuring. Houlihan Lokey Capital, Inc.
is acting as financial and restructuring advisor and Weil, Gotshal
& Manges LLP is acting as legal counsel to the Company’s Ad Hoc
Group of First Lien Creditors.
Additional Information
Additional information about the solicitation process is
available at https://dm.epiq11.com/jason, by calling the Company’s
claims agent, Epiq, at +1 (866) 897-6433 (Toll-Free) or +1 (646)
282-2500 (International), or by sending an email to
tabulation@epiqglobal.com.
About Jason Industries, Inc.
Jason Industries, Inc. is a global industrial manufacturing
company providing critical components and manufacturing solutions
to customers through its Osborn (Richmond, Ind. and Burgwald,
Germany) and Milsco (Milwaukee, Wis.) businesses. Headquartered in
Milwaukee, Wis., Jason employs more than 1,900 people in 13
countries.
Cautionary Statement Concerning Forward Looking
Statements
This press release contains “forward-looking statements” related
to future events. Forward-looking statements contain words such as
“expect,” “anticipate,” “could,” “should,” “intend,” “plan,”
“believe,” “seek,” “see,” “may,” “will,” “would,” or “target.”
Forward-looking statements are based on management’s current
expectations, beliefs, assumptions and estimates and may include,
for example, statements regarding the Chapter 11 Cases, the
Company’s ability to complete the restructuring and its ability to
continue operating in the ordinary course while the Chapter 11
Cases are pending. These statements are subject to significant
risks, uncertainties, and assumptions that are difficult to predict
and could cause actual results to differ materially and adversely
from those expressed or implied in the forward-looking statements,
including risks and uncertainties regarding the Company’s ability
to successfully complete a restructuring under Chapter 11,
including: consummation of the restructuring; potential adverse
effects of the Chapter 11 Cases on the Company’s liquidity and
results of operations; the Company’s ability to obtain timely
approval by the bankruptcy court with respect to the motions filed
in the Chapter 11 Cases; objections to the Company’s
recapitalization process or other pleadings filed that could
protract the Chapter 11 Cases; employee attrition and the Company’s
ability to retain senior management and other key personnel due to
the distractions and uncertainties; the Company’s ability to comply
with financing arrangements; the Company’s ability to maintain
relationships with suppliers, customers, employees and other third
parties and regulatory authorities as a result of the Chapter 11
Cases; the effects of the Chapter 11 Cases on the Company and on
the interests of various constituents, including holders of the
Company’s common stock; the bankruptcy court’s rulings in the
Chapter 11 Cases, including the approvals of the terms and
conditions of the restructuring and the outcome of the Chapter 11
Cases generally; the length of time that the Company will operate
under Chapter 11 protection and the continued availability of
operating capital during the pendency of the Chapter 11 Cases;
risks associated with third party motions in the Chapter 11 Cases,
which may interfere with the Company’s ability to consummate the
restructuring or an alternative restructuring; increased
administrative and legal costs related to the Chapter 11 process;
potential delays in the Chapter 11 process due to the effects of
the COVID-19 virus; and other litigation and inherent risks
involved in a bankruptcy process. Forward-looking statements are
also subject to the risk factors and cautionary language described
from time to time in the reports the Company files with the U.S.
Securities and Exchange Commission, including those in the
Company’s most recent Annual Report on Form 10-K and any updates
thereto in the Company’s Quarterly Reports on Form 10-Q and Current
Reports on Form 8-K. These risks and uncertainties may cause actual
future results to be materially different than those expressed in
such forward-looking statements. The Company has no obligation to
update or revise these forward-looking statements and does not
undertake to do so.
The Company cautions that trading in the Company’s securities
during the pendency of the Chapter 11 Cases is highly speculative
and poses substantial risks. Trading prices for the Company’s
securities may bear little or no relationship to the actual
recovery, if any, by holders of the Company’s securities in the
Chapter 11 Cases. The Company expects that holders of shares of the
Company’s common stock could experience a complete loss on their
investment, depending on the outcome of the Chapter 11 Cases.
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version on businesswire.com: https://www.businesswire.com/news/home/20200624005800/en/
Chad Paris investors@jasoninc.com
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