The Term Sheet contemplates that we will reorganize as a going concern. Specifically, the material terms of the Plan are expected to effect, among other things, and subject to certain conditions and as more particularly set forth in the Term Sheet, upon the effective date of the Plan, a substantial reduction in our funded debt obligations by:
• the issuance of a new first lien term loan credit facility in exchange for outstanding indebtedness and exposure under: (1) our revolving credit facility (the “Revolver”), which had approximately $75.0 million of borrowings and issued letters of credit as of the Petition Date (see Note 11 - Debt to the Notes to Consolidated Financial Statements for additional information), and (2) the close out amount of our cross currency swap liability and diesel swaps liability owed to the Bank of Nova Scotia, which approximated $86.3 million as of March 11, 2015 (see Note 21 - Derivative Instruments to the Notes to Consolidated Financial Statements for additional information).
• the issuance of a new second lien convertible term loan credit facility to holders of claims under the DIP Facility (as defined below);
• the issuance of common stock to holders of claims under the DIP Facility and claims under the Notes; and
• the issuance of warrants to holders of the Company’s Existing Common Stock.
If the Plan is consummated as contemplated by the Term Sheet, our Existing Common Stock and warrants to purchase shares of our Existing Common Stock will be extinguished. Holders of our Existing Common Stock will receive on a pro rata basis warrants (certain terms of which are set forth in the Term Sheet) for the right to purchase shares of common stock in the reorganized Company only if the class of holders of the Existing Common Stock votes in favor of the Plan. If holders of our Existing Common Stock vote against the Plan, then holders of our Existing Common Stock shall receive no recovery on account of their Existing Common Stock. The holders of our outstanding warrants to purchase shares of our Existing Common Stock will receive no recovery on account of these holdings.
Notice of Suspended Trading, Possible Delisting from Stock Exchanges On March 10, 2015, we received notice from the NYSE MKT LLC (the “NYSE MKT”) that the NYSE MKT had suspended our common stock from trading immediately and determined to commence proceedings to delist our common stock pursuant to Section 1003(c)(iii) of the NYSE MKT LLC Company Guide. The NYSE MKT’s determination was based on the filings in the Chapter 11 Cases, which contemplate that our existing common stock will be extinguished pursuant to a prearranged plan of reorganization. The last day that our common stock traded on the NYSE MKT was March 9, 2015. We do not intend to take any further action to appeal the NYSE MKT’s decision, and therefore it is expected that our common stock will be delisted after the completion of the NYSE MKT’s application to the SEC.
Holders of our existing common stock will receive, on a pro rata basis, warrants for the right to purchase shares of common stock in the reorganized Company only if the class of holders of the existing common stock votes in favor of the Plan. If holders of our existing common stock vote against the Plan, they will receive no recovery on account of their existing common stock. The holders of the Company’s outstanding warrants to purchase shares of the Company’s Existing Common Stock will receive no recovery on account of these holdings. The success of a reorganization, either by the Plan or another plan of reorganization, through any such exchanges or modifications will depend on approval by the Bankruptcy Court and the willingness of existing debt and security holders to agree to the exchange or modification, and there can be no guarantee of success. If such exchanges or modifications are successful, the existing holders of common stock may find that their holdings no longer have any value, are materially reduced in value or are severely diluted.
Our common stock is no longer traded on the NYSE MKT or the TSX. Our common stock is traded only in the over-the-counter market, which could negatively affect our stock price and liquidity.
Our common stock was historically listed on the NYSE MKT and the TSX under the symbol “ANV.” In connection with the commencement of the Chapter 11 Cases, effective March 10, 2015, the NYSE MKT and the TSX suspended the trading of our common stock and are taking action to remove our common stock from listing and registration on such exchanges. Our common stock is now trading in the over-the-counter market under the symbol “ANVGQ”. The extent of the public market for our common stock and the continued availability of quotations depends upon such factors as the aggregate market value of the common stock, the interest in maintaining a market in our common stock on the part of securities firms and other factors. The over-the-counter market is a significantly more limited market than the NYSE MKT and TSX, and the quotation of our common stock on the over-the-counter market may result in a less liquid market available for existing and potential stockholders to trade shares of our common stock. This could further depress the trading price of our common stock and could also have a long-term adverse effect on our ability to raise capital. There can be no assurance that any public market for our common stock will exist in the future or that we will be able to relist our common stock on a national securities exchange. In connection with the delisting of our common stock, there may also be other negative implications, including the potential loss of confidence in us by suppliers and employees and the loss of institutional investors. We are in the process of considering suspension of our reporting obligations under the Securities Exchange Act of 1934.
Our directors and management are in the process of exploring the advantages and disadvantages to us and our shareholders of suspending our reporting obligations under the Securities Exchange Act of 1934 following the expected delisting of our common stock from the NYSE MKT. No final decisions have been made in this regard, including as to the timing thereof. Upon suspension of our reporting obligations under the Securities Exchange Act of 1934, we would cease filing reports with the SEC, which will result in significantly less information about the Company being publicly available. The lack of publicly available information about the Company could adversely affect the price and liquidity of our common stock and any securities issued in connection with the Chapter 11 Cases.
