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April 1, 2019 – The Debtors filed a motion requesting each of a bidding procedures order (the “Bidding Procedures Order”) and a sales order (the “Sales Order”) [Docket No. 25]. The Bidding Procedures order would authorize (i) proposed bidding procedures, including bid protections, (ii) entry into an agreement with stalking horse bidder (the “Option Agreement and the Stalking Horse Agreement”) further to which OI has offered to purchase the Debtors’ assets for a credit bid of $175.0mn (the “Sale”) and (iii) a proposed auction and sale schedule. The Sale Order would approve the Sale.
The motion states, “The Debtors believe a prompt sale of the Assets may represent the best option available to maximize value for all stakeholders in these Chapter 11 Cases. Moreover, it is critical for the Debtors to execute on any sale transaction as expeditiously as possible, as the Debtors are utilizing the DIP Lender’s and the Prepetition Secured Lender’s cash collateral and additional financing in order to explore this sale process. Therefore, time is of the essence.”
Credit Bidding: Subject to the terms and conditions of this Agreement, in consideration of the sale of the Acquired Assets pursuant to the terms hereof, Purchaser shall (i) credit the amount of principal due under the Loans (as defined in clause (a) of the definition of Prepetition Credit Agreements) due under the Prepetition Credit Agreements, pursuant to a credit bid in the amount of $175.0mn by Purchaser, in its capacity as Prepetition Secured Lender and (ii) credit an amount up to the amount outstanding under the DIP Facility at Closing, pursuant to a credit bid by Purchaser in its capacity as DIP Lender; provided, that the portion of the Loans that is not credit bid as part of the Purchase Price shall remain a Claim in the Chapter 11 Cases.
Bid Protections and Incremental Bids: Bid protections include a break-up fee equal to 3% of the purchase price (ie $175.0mn) of $5.25mn (the “Break-Up Fee”) and reimbursement of the Stalking Horse Bidder’s fees of up to $2.0mn (the “Expense Reimbursement”). The incremental bid amount is set at $500k and the initial overbid is set as up to $7.75mn which is of the sum of the Break-Up Fee, the Expense Reimbursement and an incremental bid of $500k.
- Sale Objection Deadline: June 5, 2019
- Bid Deadline: June 6, 2019
- Auction: June 10, 2019
- Sale Hearing: June 12, 2019
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