Real Alloy, DDJ-led noteholder group ink $364 million sale agreement

By Caroline Salls

Pittsburgh, March 8 – Real Alloy Holding, Inc. and an informal group of noteholders led by funds and accounts managed by DDJ Capital Management reached an agreement in principal with the company’s official committee of unsecured creditors under which the committee will support the sale of Real Alloy to the noteholder group, according to a Real Alloy news release.

Under the asset purchase agreement, the company said the noteholder group agreed to acquire substantially all of Real Alloy’s U.S. and international operations for an estimated total purchase consideration of $364 million, plus the assumption of liabilities.

The noteholder group’s bid will remain subject to higher and better bids.

As part of reaching an agreement with the committee, Real Alloy said the asset purchase agreement provides for the assumption by the buyer of some priority and unsecured claims of the estate. Specifically, the purchaser committed to assume up to $18.6 million in liabilities on account of these claims.

Under the asset purchase agreement, 503(b)(9) claimants may receive as much as 100% on account of their claims as an upfront payment at closing in exchange for terms including negotiated credit limits, volume and pricing, the release said.

Vendors holding general unsecured claims may also receive recoveries on their claims, depending upon credit and other commercial terms offered.

Under the terms of the stalking horse bid, Real Alloy said it expects to see its secured debt obligations reduced by roughly $200 million, which will provide the company with a strong balance sheet and ample liquidity post-Chapter 11 emergence.

“We remain on track to complete the sale process as planned by the end of April and are pleased that Real Alloy’s secured and unsecured creditors have been able to reach a mutually agreeable settlement at this time,” Real Alloy president Terry Hogan said in the release. “This paves the way forward for the company.

“As we work as expeditiously as possible toward closing, our day-to-day operations will move forward as usual.”

The holding company is based in Sherman Oaks, Calif. It filed for bankruptcy on Nov. 17 in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 case number 17-12464.

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