Aquilex wraps exchange offer for 11 1/8% notes after securing waiver

By Susanna Moon

Chicago, Jan. 30 - Aquilex Holdings LLC said holders tendered $221,253,000, or about 98.33%, of its $225 million outstanding principal amount of 11 1/8% senior notes due 2016.

The voluntary exchange offer ended at 5 p.m. ET on Jan. 27, extended from Jan. 26.

The minimum tender requirement was waived with the consent of the administrative agent for the company's senior secured credit facility and holders of two-thirds of the notes, according to a company press release.

As a result, all of the conditions to the exchange offer have been satisfied, and the company said it expects to complete the exchange offer by Feb. 3.

The offers launched on Dec. 23 after institutions holding 100% of the company's first-lien debt and 100% of its second-lien debt and holders of roughly 92% of the 11 1/8% notes reached a financial restructuring agreement with Aquilex.

During the restructuring process, all creditors were to receive payment in full, according to a previous news release.

As of 5 p.m. ET on Jan. 25, holders of $221,145,000 of the notes had tendered their securities for exchange along with cash tenders for an additional $95,000 principal amount of notes, together representing 98.33% of the outstanding amount, according to exchange and information agent Epiq Systems, Inc.

More details

In connection with the rights offering, noteholders will invest $80 million of new capital into the company, the release noted.

As previously noted, the company extended the related rights offering for holders to tender their notes and elect the equity exchange option until 5 p.m. ET on Jan. 30.

Once completed, the restructuring will reduce Aquilex's outstanding debt by 70%, or about $318 million, and debt service costs will decline by 69% to about $13 million annually.

This reduction in debt and related interest payments, coupled with the company's cash position of $36.5 million as of Jan. 27 and a new $50 million revolving credit facility, significantly bolsters the company's balance sheet and improves its capital structure, the company said.

In conjunction with the completion of the restructuring, affiliates of Centerbridge Partners, LP will be the controlling shareholder of Aquilex.

After the offer settles, "with our improved capital structure we will have the financial flexibility necessary to invest in the business," Bill Varner, president and chief executive officer of Aquilex, said in the release.

Aquilex also said previously that it entered into a commitment letter with GE Capital for a $50 million exit revolver. The amount was increased from $40 million.

Aquilex is an Atlanta-based provider of maintenance, repair and industrial cleaning services for the energy industry.

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