VER files under Chapter 11, agrees to merge with PRG
- Details
To facilitate the implementation of this pre-negotiated transaction, VER has filed voluntary petitions for reorganisation under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. These filings only affect the company's North American operations, says the company. The agreement is part of a transaction supported by VER’s second lien lenders, including funds managed by GSO Capital Partners.
VER expects to continue normal operation during the restructuring and says clients “can be confident that their project will not be interrupted”.
Digby Davies, CEO of VER, comments: "Entering into this agreement and undertaking the court-supervised restructuring process will greatly reduce VER's outstanding debt and position the company for the merger with PRG. VER remains a strong business with more customers than ever before, and a customer satisfaction rating that is highest in the industry. The actions announced today will provide a stronger capital structure and sufficient cash to fund operations."
Davies continues: "During the process we will continue to provide our clients with the largest inventory of equipment and unmatched reliability and expertise. Clients will work with their trusted VER representative and their projects will not be interrupted."
Jere Harris, chairman and CEO of PRG, adds: "We are pleased to enter into this agreement with VER and partner with GSO. VER's terrific client base and vast product and service offerings are a natural complement to our business. Upon completion of the transaction, we look forward to working closely with the talented VER team to strengthen our business and deliver even greater value and service to our clients."
In conjunction with the proposed transaction, VER has received commitments from existing lenders, including funds managed by GSO Capital Partners, for up to $364.7m in debtor-in-possession (DIP) financing to support its continued operations during the Chapter 11 process. VER has filed a number of customary first day motions with the Bankruptcy Court seeking authorization to continue to support its business operations during the transaction process, including authority to continue to pay wages and provide health and other employee benefits without interruption and to continue programs which support VER's service to its customers.
VER intends to pay suppliers in full under normal terms for goods and services provided after the filing date of 5 April. Additional information is available on VER's website at VER.com/restructure. Court documents and additional information can be found at a dedicated website administrated by VER's claims agent, KCC, at www.kccllc.net/VER.
Kirkland & Ellis LLP and Klehr Harrison Harvey Branzburg LLP are serving as VER's legal counsel, AlixPartners LLP is serving as its restructuring advisor and PJT Partners is serving as its financial advisor. Skadden, Arps, Slate, Meagher & Flom LLP, and Perella Weinberg Partners are serving as advisors to Bank of America Merrill Lynch. FTI Consulting and Morgan, Lewis & Bockius LLP are serving as advisors to GSO Capital Partners.
(Jim Evans)
