TPC Group disclosure statement approved; plan hearing set for Nov. 7

By Sarah Lizee

Olympia, Wash., Sept. 28 – TPC Group Inc.’s disclosure statement for its second amended Chapter 11 plan was approved by the U.S. Bankruptcy Court for the District of Delaware, according to an order filed Tuesday.

The plan confirmation hearing is scheduled for Nov. 7.

TPC said the plan is the result of extensive negotiations with key economic stakeholders, including the asset-based lending and debtor-in-possession lender, the supporting noteholders, and the supporting sponsors.

The plan provides for exit financing that will include an up to $200 million exit asset-based lending facility, $350 million of exit notes, and $150 million in new money HoldCo notes.

It also provides for $202.5 million in new capital, consisting of $135 million of equity direct allocation securities and $67.5 million of debt direct allocation securities.

The ABL DIP lender will receive, at the debtors’ option and with the consent of required supporting noteholders, either (i) on a dollar-for-dollar basis, conversion of such the claims into loans and letter of credit participations under the exit ABL facility or (ii) payment in full in cash from proceeds of the exit ABL facility.

The plan also provides for payment in full in cash of the term loan DIP claims.

Holders of 10˝% notes secured claims will receive the following:

• Cash in the amount of $350 million, plus all unrestricted cash held by the debtors on the effective date in excess of $50 million, with the excess cash to be reduced by (i) any amounts drawn and letters of credit issued (whether or not drawn) under the exit ABL facility, and any reserves and other cash distribution requirements provided under the plan;

• 100% of the new common shares, subject to dilution by the equity rights offering securities, the equity direct allocation securities and the put option premium securities, and the management incentive plan;

• 100% of the equity subscription rights (without oversubscription rights) to participate in a $165 million new money equity rights offering to purchase new common shares, which is backstopped by some supporting noteholders;

• 100% of the debt subscription rights (without oversubscription rights) to participate in an $82.5 million debt rights offering to purchase HoldCo notes, which is backstopped by some supporting noteholders; and

• $80 million in principal amount of the HoldCo notes.

If the class votes to accept the plan, holders of general unsecured claims will receive 100% of the GUC trust interests, which will entitle them to their pro rata share of $5 million in cash plus the right to receive an additional $5 million if the reorganized debtors’ 2024 adjusted EBITDA exceeds $250 million; provided, that distributions on account of allowed 10˝% notes deficiency claims will be waived.

If the class votes to reject the plan, holders will receive no recovery and the claims will be discharged.

Existing interests will be canceled.

TPC Group is a Houston-based processor and service provider of value-added products derived from niche petrochemical raw materials. The company filed bankruptcy on June 1 under Chapter 11 case number 22-10493.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.