UCI files revised plan supported by unsecured creditors, noteholders

By Caroline Salls

Pittsburgh, Oct. 3 – UCI International, LLC filed a revised plan of reorganization and related disclosure statement supported by its official committee of unsecured creditors and an informal committee of senior noteholders, according to a company news release.

In addition, UCI said it reached an agreement with senior unsecured noteholders comprised of funds and accounts under the management of Blackrock Financial Management, Inc., Credit Suisse Asset Management, LLC, and J.P. Morgan Investment Management, Inc. to backstop $30 million of incremental exit financing.

Collectively, the company said these parties hold more than 80% in principal amount of the senior unsecured notes outstanding and will become the controlling equity holders of reorganized UCI under the plan.

According to the release, the plan, consistent with a stipulation between the company, the unsecured creditors committee and the lenders and agent under UCI’s pre-bankruptcy ABL credit facility, provides for the payment in full of pre-bankruptcy ABL credit facility claims.

“We are pleased with the progress made to date in our bankruptcy filing,” UCI general counsel Keith Zar said in the release.

“The filing of the plan moves UCI one step closer to a successful restructuring and positions UCI for long-term success by reducing outstanding debt and strengthening our balance sheet.

“UCI continues to have a strong position in the marketplace and is well positioned to take advantage of future opportunities.”

Creditor treatment

Under the revised plan, all existing equity interests will be extinguished and cancelled.

Pre-bankruptcy ABL credit facility claims will be paid in full in cash.

Holders of senior notes claims, holders of general unsecured claims not electing cash and rights offering participants will receive 91% of the new common stock of reorganized UCI, with 5% earmarked for management incentive plan payments and 4% for backstop fees.

The plan also provides for the reinstatement or payment in full in cash of claims entitled to administrative expense or priority status.

Plan comparison

In comparison, under the original version of the plan, all existing equity interests in UCI Holdings would have been extinguished and cancelled.

The holders of all pre-bankruptcy ABL credit facility claims would have had their claims restructured at the debtors’ sole discretion, subject to a rank contribution election.

A total of 95% of the new common stock of reorganized UCI and 100% of litigation trust units would have been distributed to holders of senior notes claims in exchange for the cancellation of their pre-bankruptcy debt and to holders of general unsecured claims.

If a rights offering was completed as part of the plan, participating parties would have received some of the stock and trust units in the form of new warrants.

The remaining 5% of the new common stock would have been reserved for a management incentive plan.

Holders of claims entitled to administrative expense or priority status would have been paid in full in cash.

The disclosure statement hearing is scheduled for Oct. 14. The company has asked the court to schedule the plan confirmation hearing for Dec. 6.

UCI is an Evansville, Ind.-based supplier to the light- and heavy-duty vehicle aftermarket for replacement parts, including filtration, fuel delivery systems, vehicle electronics and cooling systems products. The company filed bankruptcy on June 2 under Chapter 11 case number 16-11354.

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