Metalico Inc. (MEA)

[polkamatic]

Item 7.01 Regulation FD Disclosure.
ih.advfn.com/p.php?pid=nmona&article=63202158

On August 4, 2014, TPG Specialty Lending, Inc. ("TSL"), as agent for the lenders (the "Lenders") party to the Financing Agreement dated as of November 21, 2013 by and among Metalico, Inc. (the "Company"), each of its subsidiaries signatory thereto, the Lenders, TSL as agent, and PNC Bank, National Association, as service agent (the "Financing Agreement") delivered a Payment Blockage Notice (the "TSL Notice") to the holders (the "Holders") of the Company’s 7% Convertible Notes (the "Notes") triggering a 210-day standstill period under the Subordination Agreement dated May 1, 2008 between the Company’s senior secured lenders and the holders of its 7% Convertible Notes and their respective successors and assigns. As previously disclosed, under the terms of the Notes the Holders were entitled to deliver notices of redemption on or before June 30, 2014, requiring the Company to redeem the Notes, at par, plus any accrued but unpaid interest through the date of redemption. Such notices were held in abeyance following an agreement in principal announced June 30, 2014, which has not yet been effectuated as negotiations to resolve, among other matters, certain logistical and intercreditor issues continue. The primary effect of the TSL Notice is to block any payments of principal or interest to the Holders. The aggregate principal balance of the Notes is approximately $23.5 million (with accrued interest, approximately $24.1 million). Availability provided under the Financing Agreement to redeem the Notes has been restricted by the Lenders due to the Company’s noncompliance with the Maximum Leverage Ratio covenant as of March 31, 2014 as prescribed by the Financing Agreement. The Company’s inability to redeem the Notes is a default under the terms of the Notes and its failure to redeem the Notes is a default under the terms of the Financing Agreement. TSL delivered the TSL Notice as a result of such defaults The Company is negotiating with the Holders and the Lenders to reach an agreement that will satisfy the Holders’ repurchase right which may include an extension of such right, the issuance of new debt or equity or a combination of both, starting with the framework of general agreements in principal reached among the parties on June 30, 2014. No assurance can be provided that the Company will be able to reach definitive agreements with the other parties or that the terms of new agreements will be as favorable as the Company's previously announced proposed terms. The Company has positive cash flow from operations and sufficient liquidity to maintain operations, and is current on its trade payables.