OSG Group’s pre-packaged Chapter 11 plan effective as of Aug. 31

By Sarah Lizee

Olympia, Wash., Aug. 31 – OSG Group Holdings, Inc.’s pre-packaged Chapter 11 plan of reorganization went into effect on Wednesday, just two days after being confirmed by the U.S. Bankruptcy Court for the District of Delaware on Monday.

As previously reported, of the company’s $25.4 million debtor-in-possession facility provided by prepetition second-lien lenders, the $15 million in new money term loans will convert on the effective date into new equity investment in exchange for the issuance of 28.8% of new convertible preferred equity, and $1.87 million in principal amount of new mezzanine debt loans in respect of accrued interest on the rolled-up DIP term loans.

The plan provides for the replacement of $598.1 million of existing first-lien claims with about $601.1 million of amended and restated first-lien loans and the conversion of about $157.9 million of existing second-lien claims to new mezzanine debt loans and 100% of the reorganized common equity, subject to dilution by the management incentive plan and the conversion of new convertible preferred equity.

The amended and restated first-lien loans bear interest at SOFR plus 675 basis points for term A loans, SOFR plus 700 bps for term B loans, 7.25% for term GBP loans and SOFR plus 625 bps to 650 bps, based on leverage, for revolving loans. Term loans will mature in 2026 and revolving loans will mature in 2025.

The plan also provides for the equitization of the Globalex secured note, the Vox unsecured promissory note and the OSG Feb. 8 unsecured promissory note, each 100% held by Aquiline, and contribution of Aquiline’s Globalex interest to the debtors in exchange for 43.9% of the new convertible preferred equity.

All general unsecured claims will be paid in full or reinstated.

The plan additionally provides for the assumption of all unexpired leases and executory contracts, with continued performance and payment in the ordinary course.

Administrative claims and professional fee claims will be paid in cash.

Holders of other secured claims will receive payment in full in cash, the collateral securing their claims or reinstatement of their claims.

Holders of other priority claims will receive cash either on the effective date or in installments.

Intercompany claims and interests will be reinstated or canceled with no distribution.

Common interests and preferred interests will be canceled with no distribution.

OSG is a Ridgefield Park, N.J.-based provider of omnichannel billing and payment solutions, customer engagement and critical customer communication management. The company filed bankruptcy on Aug. 6 under Chapter 11 case number 22-10718.

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