Allied Nevada Gold files plan based on restructuring support agreement

By Caroline Salls

Pittsburgh, April 27 – Allied Nevada Gold Corp. filed a plan of reorganization and related disclosure statement on April 24 with the U.S. Bankruptcy Court for the District of Delaware.

The company said the plan incorporates a settlement reached with a majority of its key stakeholders on a restructuring transaction that will de-lever its balance sheet to allow it to implement financial and operational restructuring.

Allied Nevada said holders of at least 67% of the total outstanding principal amount of note claims and 100% of the holders of secured ABL claims agreed to support the restructuring.

Creditor treatment

Under the plan:

• Holders of secured ABL claims will receive a share of secured ABL/swap cash payments not made before the plan effective date after a $10 million secured ABL cash payment, as well as new first-lien term loans.

In addition, any unpaid amounts owed to the holders of secured ABL claims under the company’s debtor-in-possession facility will be due in cash on the plan effective date;

• Holders of secured swap claims will receive a share of the secured ABL/swap cash payments not made before the effective date and first-lien term loans.

In addition, the amounts owed under the DIP facility will be due on the effective date;

• Holders of DIP facility claims will receive a share of DIP facility consideration in exchange for its share of the first $25 million of allowed DIP facility claims, as well as a share of new second-lien convertible term loans.

The DIP facility consideration will be subject to dilution on account of a management incentive plan, new warrants and conversion of the second-lien convertible term loans;

• Holders of note claims may elect to receive a share of 75% of new common stock, subject to dilution on account of the incentive plan, the exercise of the new warrants and the conversion of the term loans or a share of a cash distribution;

• Holders of swap deficiency claims and general unsecured claims will be paid in full in cash plus post-bankruptcy interest;

• Subordinated securities claims will be extinguished, and holders will not receive any property or consideration provided, however, that the plan will not extinguish any rights a holder may have against existing insurance maintained by the Allied Nevada debtors;

• Intercompany claims will be adjusted, continued or discharged to the extent determined by the debtors; and

• If the class of holders of existing equity interests votes in favor of the plan, each holder will receive a share of the new warrants. If the class votes against the plan, each holder will receive no recovery.

The disclosure statement hearing is scheduled for June 1.

Allied Nevada is a Reno, Nev., gold and silver miner that filed for bankruptcy on March 10. Its Chapter 11 case number is 15-10503.

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