Dixie Electric pre-packaged plan of reorganization confirmed by court

By Caroline Salls

Pittsburgh, Dec. 13 – Dixie Electric, LLC’s pre-packaged plan of reorganization was confirmed Thursday by the U.S. Bankruptcy Court for the District of Delaware.

The order also approved the disclosure statement related to the plan.

As previously reported, the company entered into a restructuring support agreement with holders of more than 67% of pre-bankruptcy secured credit agreement claims, administrative agent Wilmington Trust, NA, the lender under its unsecured loan agreement, the holder of the equity interests in parent FR Dixie Holdings Corp. and consenting pre-bankruptcy lenders in their capacities as committed lenders under a $17.5 million debtor-in-possession facility and a $30 million exit facility.

Dixie said the restructuring will recapitalize the company’s balance sheet through a debt-to-equity conversion of all of the its pre-bankruptcy funded debt, provide liquidity through the DIP and exit financing, maintain the ongoing business operations of the company with limited interruption during the Chapter 11 cases and implement a comprehensive settlement and resolution of claims held by or against the Dixie debtors.

In particular, implementation of the restructuring transactions will enable Dixie to de-lever its balance sheet by extinguishing roughly $300 million of debt from the conversion of all of the secured and unsecured loan claims into post-reorganization equity and to position its businesses for stability and success after emergence from bankruptcy.

Holders of secured loan claims will receive a share of 98.25% of the new common stock, subject to dilution by a management incentive plan.

Holders of unsecured loan claims will receive a share of 1.75% of the new common stock, subject to dilution by the incentive plan.

General unsecured claims will be paid in full in cash.

Existing parent interests will be cancelled, and the consenting equityholder will receive no recovery under the plan.

Dixie, an Odessa, Texas-based provider of electrical infrastructure materials and services to the upstream oil and gas sector, filed bankruptcy on Nov. 2. The Chapter 11 case number is 18-12477.

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