Commons getting 17 cents in cash or cash and some shares in the company after BK.
Prepack Coming
Reddy Ice Prepack to Give Stock for Second-Lien Notes
Reddy Ice Holdings Inc., a Dallas-based ice maker and distributor, said this morning that it has agreement with debt holders on a bankruptcy reorganization in which second-lien noteholders will own the new stock and existing common shareholders will be given as much as 17 cents for each existing share.
The reorganization is supported by holders of 60 percent of the first-lien debt, 58 percent of the second-lien debt, and 92 percent of the discount notes. Noteholders will complete voting on the plan by May 8.
Reddy Ice expects to emerge from reorganization within 45 days after the Chapter 11 petition is filed. Unsecured trade suppliers will be paid in full. Existing shareholders will have the option of sharing 2 percent of the new stock in lieu of some of the cash.
Holders of discount notes are to receive $4.7 million in cash and a three-month note for $1.2 million. First-lien debt will remain in place.
The reorganization will enable Reddy Ice to carry out an offer to acquire Arctic Glacier Inc., the owner of 39 plants making and distributing ice in Canada and the U.S. Arctic Glacier is being reorganized principally in Canada under the Companies’ Creditors Arrangement Act.
The Chapter 11 case will be financed with a $70 million loan from Macquarie Bank Ltd. The loan will convert into a $50 million facility upon exit from bankruptcy.
Reddy Ice also filed financial statements this morning, showing a $69.5 million net loss in 2011 on revenue of $328.5 million. The operating loss in the year was $8.1 million. The balance sheet was upside down, with assets of $434 million and debt totaling $530.8 million.
The $300 million in 11.25 percent first-lien notes due 2015 last traded yesterday for 90.5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
The $139.4 million in second-lien notes last traded yesterday for 11.75 cents on the dollar, Trace said. The $11.8 million in unsecured 10.5 percent discount notes sold on April 2 for 79.7 cents on the dollar.
In 2010 the net loss was $40.5 million on revenue of $315.5 million. Interest expense in 2010 was $50.1 million with $8.8 million in debt refinancing costs.
Reddy Ice completed an exchange offer in March 2010 in which 10.5 percent senior discount notes were swapped for an identical amount of new senior secured second-lien notes.
