Allied Nevada Gold amends plan ahead of disclosure statement hearing

By Caroline Salls

Pittsburgh, Aug. 26 – Allied Nevada Gold Corp. filed an amended plan of reorganization and related disclosure statement Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company reached agreements in principle last week with its official committee of unsecured creditors and an informal group of senior unsecured noteholders to modify the plan to add a convenience class for holders of unsecured claims who opt to share in $3 million of cash, minus a reserve for fees and expenses to fund a creditor representative.

The plan changes also call for the inclusion in the plan supplement of minority shareholder protections, an agreement that the reorganized company will make its best effort to use its existing vendors after the effective date and an agreement that the creditors committee will obtain and support specified releases.

In addition, Allied Nevada and the noteholders’ group reached an agreement in principle with the official committee of equity security holders for the case under which the equity committee agreed to support confirmation of an amended plan and not oppose any other Chapter 11 case issues.

Creditor treatment

The terms of the amended plan include the following:

• Holders of secured ABL claims and secured swap 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, a secured ABL/swap claims excess cash flow payment and 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 DIP facility claims will receive a share of DIP facility consideration provided, however, that only the DIP backstop lenders will receive a share of a 3% backstop put option payment. The DIP facility consideration will be paid in its entirety from exit financing;

• Holders of unsecured claims will receive a share of 100% of new common stock in the reorganized company, subject to dilution by the conversion of new second-lien convertible notes and new warrants, which were added to the amended plan, or will receive the convenience claim distribution;

• Holders of existing equity interests and subordinated securities claims will receive a share of the new warrants. Previously, these interest holders and claimants were slated to receive no distribution;

• Intercompany claims will be adjusted, continued, contributed to capital or discharged to the extent determined by the debtors.

New warrants

According to the amended disclosure statement, the new warrants will be exercisable into a total number of shares of new common stock that is equal to 17.5% of the sum of the total share number plus the number of shares of new common stock issued upon exercise of the warrants.

The exercise price per share of the new common stock for the new warrants will be equal to the adjusted equity value divided by the total share number.

The warrants will expire on the earlier of seven years after the plan effective date and the completion of a liquidity event.

The disclosure statement hearing is scheduled for Aug. 27.

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

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