Enviva(US:EVA)2024-03-12 16:00Restructuring Support Agreement - The Restructuring Support Agreement will become effective upon execution by the required percentage of creditors[13]. - The definitive documentation for the Restructuring will include the Plan and all related exhibits and schedules[19]. - The restructuring transactions will be subject to the completion of definitive documentation and approval rights of the parties involved[2]. - The Debtors are committed to completing the Restructuring as outlined in the Plan and will use commercially reasonable efforts to meet all milestones set forth in the Agreement[33]. - The Debtors will not solicit proposals for any restructuring transaction other than the Restructuring, ensuring focus on the current plan[34]. - The Debtors must provide timely notice of any events that could materially affect the Restructuring or lead to a breach of the Agreement[35]. - The Debtors are required to operate their business in the ordinary course and consistent with past practices during the Chapter 11 process[35]. - The Debtors will support the MS Bond Settlement and Epes Bond Settlement without imposing additional costs on any party[30]. - The Debtors are obligated to obtain all necessary governmental and regulatory approvals for the implementation of the Restructuring[33]. - The Debtors must oppose any third-party motions that could disrupt the Restructuring process[33]. - The company is required to comply with each milestone set forth in the restructuring agreement[40]. - The restructuring support parties have the right to terminate their obligations if any changes adversely affect the treatment of their claims compared to other classes[42]. - The company must negotiate in good faith to address any legal or structural impediments that may delay the restructuring[40]. - The holders of at least two-thirds of the 2026 Notes Claims can terminate the agreement if the company fails to meet any milestones[45]. - The company is prohibited from entering into any definitive agreements for mergers or acquisitions without prior consent from the majority consenting noteholders[40]. - Any material breach of the agreement by the company can lead to termination by the restructuring support parties[46]. - The company is not allowed to file any motions inconsistent with the restructuring agreement[40]. - The restructuring support parties can terminate their obligations if the company supports any alternative transaction without consent[46]. - The Debtors may terminate obligations under the Agreement upon the occurrence of specific events, known as "Debtor Termination Events"[49]. - The Agreement can be mutually terminated by written agreement among the Debtors and Restructuring Support Parties[50]. - A material breach by a Restructuring Support Party that remains uncured for five business days may lead to termination of the Agreement[51]. - The Debtors must comply with obligations to provide access and information to Restructuring Support Parties and Advisors[53]. - The Agreement will automatically terminate upon the occurrence of the Effective Date[50]. - The Debtors acknowledge that interest on all principal and interest related to the Senior Secured Credit Facility Loans will continue to accrue from the Petition Date[57]. - The Debtors will pay or reimburse all reasonable and documented fees and expenses related to the restructuring, including those for legal and financial advisors[58]. - The Agreement is legally valid and binding, enforceable against each Debtor in accordance with its terms, subject to bankruptcy laws[64]. - Each Restructuring Support Party represents that it has the requisite authority to enter into the Agreement and perform its obligations[62]. - The Agreement does not constitute a solicitation for acceptances to the Plan until the Disclosure Statement is received[60]. - The Parties reserve their rights if the transactions contemplated in the Agreement are not consummated[66]. - The agreement requires prior written consent from affected lenders for any modifications that disproportionately affect their claims[71]. - The company has waived the right to a jury trial in any disputes arising from the agreement, opting for bench trials instead[73]. - The agreement is governed by the laws of the State of New York, with exclusive jurisdiction in New York courts[72]. - The company emphasizes that no third-party beneficiaries are intended under the agreement, which is solely for the benefit of the parties involved[74]. - All notices related to the agreement must be in writing and delivered to specified addresses[75]. - The agreement constitutes the entire understanding between the parties, superseding all prior negotiations and agreements[79]. - The company reserves the right to protect its claims and defenses, even if the restructuring plan is not consummated as outlined[82]. - Public disclosures regarding the agreement are subject to confidentiality provisions, with certain exceptions for legal requirements[81]. - The agreement allows for electronic execution and delivery of counterparts, facilitating the signing process[80]. Chapter 11 Process - The Restructuring will be implemented through jointly administered voluntary cases under Chapter 11 of the Bankruptcy Code[9]. - The Debtors plan to commence Chapter 11 Cases by filing petitions for relief no later than March 12, 2024[25]. - The Debtors aim to obtain entry of the Interim DIP Order within seven calendar days after the Petition Date[25]. - The Debtors are required to file the Plan and Disclosure Statement with the Bankruptcy Court no later than 120 calendar days after the Petition Date[27]. - The Bankruptcy Court is expected to enter the Confirmation Order no later than 185 calendar days after the Petition Date[27]. - The Debtors will have consummated the transactions contemplated by the Plan no later than 205 calendar days after the Petition Date[27]. - The Debtors will seek to reject certain Rejected Customer Contracts within 45 calendar days after the Petition Date[25]. - The Debtors will hold weekly update calls with the Ad Hoc Group to discuss business operations and the progress of the Chapter 11 Cases[35]. - The Bankruptcy Court's order granting relief from the automatic stay could materially affect the Debtors' ability to operate[48]. - The Debtors must provide draft copies of significant motions and press releases to the Ad Hoc Group at least three business days prior to filing[53]. Financing and Capital Structure - The proposed DIP financing includes a total of $500 million, with Tranche A and Tranche B each amounting to $250 million, where Tranche A can be converted into reorganized equity[109]. - The company aims to negotiate a new 1L RCF of $750 million, which will be secured by a first lien on substantially all assets[108]. - The Management Incentive Plan (MIP) will grant 3.5% of reorganized equity in the form of RSUs at emergence, with an additional 6.5% at the discretion of the new board[108]. - The restructuring plan anticipates a valuation ceiling based on total enterprise value (TEV) equal to the sum of prepetition secured debt claims plus anticipated DIP loans[108]. - The company plans to repay Tranche B DIP and any Tranche A amounts not converted at emergence using proceeds from the new financing[108]. - Existing equity holders will have the ability to participate in the company-allocated portion of the DIP commitments[109]. - The restructuring proposal includes provisions for customary minority investor protections and information rights[108]. - DIP loans will include an option to be repaid in cash at par plus a 3% Exit Fee or converted into equity at a discount equivalent to the ERQ discount[110]. - A maximum variance of $2 million or 15% is permitted for liquidity covenants, excluding professional fees and expenses[110]. - Minimum liquidity covenant set at $30 million, tested daily[110]. - Weekly testing of adequate protection claims and liens, with new budgets issued every four weeks[110]. - Filing of an Acceptable Plan of Reorganization and Acceptable Disclosure Statement by the Debtors is scheduled for T + 120 days[110]. - Entry of the Final DIP Order is expected by T + 35 days[110]. - Monthly financial reporting will include bi-weekly variance reporting and updated budgets due every four weeks[110]. - DIP lenders will have access to a private side datasite for critical vendor and contract negotiation reports on a weekly basis[110]. - The Exit Fee will be 5% if repaid in cash for reasons other than declining the Conversion Option[110]. - Customary professional fee carveout to be agreed upon as part of the DIP terms[110]. Stakeholder Engagement - The Debtors will deliver an initial draft of their revised long-term business plan to the Ad Hoc Group no later than 90 calendar days after the Petition Date[25]. - The restructuring support parties are committed to cooperate with the Debtors to obtain approval of the DIP Financing[27]. - The Debtors will negotiate modifications to certain Customer Contracts with key customers in consultation with the Ad Hoc Group[29]. - The Debtors will provide the Ad Hoc Group with documentation related to any unsolicited Alternative Transaction Proposals received[34]. - Transfers of Company Claims/Interests are restricted unless the transferee agrees in writing to be bound by the Agreement[54]. - Qualified Marketmakers are exempt from becoming Restructuring Support Parties for certain transfers of Company Claims/Interests[55].