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The motion notes, “The Debtors commenced these chapter 11 cases to stabilize business operations, address near-term debt maturities, and facilitate a value-maximizing restructuring transaction. The Debtors, with the support of Mercuria Asset Holdings (Hong Kong) Limited (together with its affiliates, ‘Mercuria’), intend to undertake a robust, 120-day process to market their business as a going concern and otherwise solicit highest or otherwise best offers for the benefit of all parties in interest. Over the four months leading to the Petition Date, Mercuria provided the Debtors with liquidity and funding that have enabled the Debtors to bridge to an orderly and organized chapter 11 filing while minimizing disruption to their underlying businesses.
Mercuria has further agreed to continue funding the Debtors through these chapter 11 cases with commitments of $532 million of DIP financing and has provided a Stalking Horse baseline bid that provides $681 million in value to the Debtors’ estates (through credit bid, cash, and assumed liabilities). That bid is the byproduct of hard fought, arms’ length, good faith negotiations between the Debtors and Mercuria that began in the summer of 2018 and culminated with the parties’ entry into the Stalking Horse APA….In exchange for the benefits provided by the Stalking Horse Bid (as described more fully below), including the agreement to serve as a floor for purposes of the Auction, the Stalking Horse APA contemplates certain bid protections—namely, a break-up fee in the amount of $19 million and reimbursement of Mercuria’s reasonable and documented expenses (collectively, the ‘Bid Protections’)—in the event the marketing process delivers value to these estates in excess of the Stalking Horse Bid.
The Debtors submit that the proposed marketing process, the Bidding Procedures, and the Stalking Horse APA represent the best available restructuring alternative at this time. To be sure, the Debtors explored and negotiated alternative transactions predicated on non-binding proposals with other interested parties prior to entering into the Stalking Horse APA. The Debtors also have negotiated a minimum cash component of the Purchase Price of $15 million to ensure these chapter 11 cases can be administered responsibly following the consummation of the Stalking Horse APA transaction. And critically, the Debtors—as the sole fiduciary for all parties in interest—have negotiated room to continue to discharge their duties in furtherance of any transaction that maximizes the value of their estates. Mercuria, critically, has provided a value maximizing path forward by agreeing to both fund these chapter 11 cases and serve as a stalking horse bidder. If a higher or otherwise better restructuring alternative materializes, the Debtors will, subject to the terms of the Stalking Horse APA and the proposed Bidding Procedures, pursue and potentially implement such alternative as value-accretive to their estates.”
The motion proposes the following general timeline: (i) a February 19, 2019 deadline to submit qualified competing bids; (ii) an auction, if necessary, to be held on February 18, 2019 and (iii) a February 22, 2019 sale hearing.
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