Each one in plain English, with the numbers worked through for a shareholder.
1 Apr 2016asset acquisition disposition▼ BadMajor
The sale of substantially all Walter's Alabama assets closed on Mar 31, 2016 to Warrior Met Coal, LLC (formerly Coal Acquisition LLC), for about $5.4 million cash, a credit bid of about $1.15 billion of first-lien debt (reduced from the $1.25 billion originally agreed), and assumed liabilities. This completes the November 2015 stalking horse deal. The company and other debtors now say they have no further material business operations and are evaluating a wind-down of remaining assets. All directors except William G. Harvey and all officers resigned, including CEO Walt Scheller and General Counsel Earl Doppelt; Harvey became sole director and holds the president, secretary, treasurer, CFO and executive VP roles. Bylaws now require a minimum of one director. The press release says Walter Canada (assets in Canada and the UK) has been under Canadian creditor protection since Dec 7, 2015. This filing does not state any distribution to common shareholders.
Susquehanna Fundamental Investments, LLC, Susquehanna Capital Group, Susquehanna Securities reported a Walter Energy, Inc. shareholding of 593,880 shares (0.70% of votes) in a periodic institutional filing.
On Feb 8, 2016 Walter entered a new debtor-in-possession loan of up to $50 million with Citibank, N.A. as agent, for working capital and bankruptcy costs. It bears 12% interest payable in cash at termination, carries a $3.75 million upfront fee (7.5%), a put option premium and a 2.5% drawdown fee, and ranks ahead of other claims. It matures Feb 29, 2016, with extensions tied to closing the 363 sale. This funds the company through the asset sales described earlier, and the filing again says common holders are contemplated to get no distribution.
On Jan 31, 2016 Walter signed a second sale agreement, with Seminole Coal Resources, ERP Compliant Coke and ERP Environmental Fund (affiliates of ERP Compliant Fuels / Virginia Conservation Legacy Fund), covering substantially all its remaining U.S. assets after the Coal Acquisition sale. The press release names the West Virginia properties (Gauley Eagle, Maple) plus Walter Coke and Taft in Alabama. The buyers pay by assuming liabilities; no cash price is stated. Canadian and UK assets are excluded. The sale needs court approval and must close by Feb 29, 2016 (extendable up to 30 days). The filing repeats that common holders are currently contemplated to receive no distribution.
On Nov 5, 2015 Walter signed a 'stalking horse' (opening bid, open to higher offers) agreement to sell substantially all its Alabama assets to Coal Acquisition LLC, a company formed by members of its senior lender group, for about $5.4 million cash, a credit bid of about $1.25 billion of first-lien debt, and assumption of certain liabilities. This is the Section 363 asset-sale route that the July 2015 Restructuring Support Agreement allowed as an alternative to the debt-to-equity plan. The filing says a 363 sale would cause the common stock to lose substantial value and that common holders are currently contemplated to receive no distribution. Closing is subject to court approval and labor-contract conditions, and is required by Feb 29, 2016 (extendable up to 30 days).
On July 30, 2015 the NYSE filed Form 25 with the SEC to remove Walter's common stock from listing, effective at the opening of business on August 10, 2015. The stock trades on the OTC Pink market as 'WLTGQ'. This completes the delisting begun July 8.
On July 15, 2015 Walter and certain US subsidiaries filed Chapter 11 in the Northern District of Alabama; Canadian and UK operations are not included. A Restructuring Support Agreement with some first-lien lenders and noteholders provides for a debt-to-equity conversion of the credit agreement and 9.500% first-lien notes under a plan, with use of cash collateral for up to seven months. If plan milestones are missed, those creditors can force a sale of substantially all assets instead. The filing accelerated about $978.2M of term loan, $388.0M of 2020 notes, $383.3M of 2021 notes, $970.0M of first-lien notes and $360.5M of second-lien notes. The filing does not say what happens to common shareholders, though converting first-lien debt to equity suggests (inference) they are at serious risk of being wiped out or heavily diluted.
On July 8, 2015 the NYSE suspended trading in Walter's stock and began delisting proceedings, saying the price was 'abnormally low'. The company does not intend to appeal. The stock began trading on the OTC Pink market as 'WLTG' on July 9. This escalates the March 2015 below-$1 notice.
On March 5, 2015 the NYSE told Walter its stock's 30-day average closing price had fallen below the $1.00 minimum. It has six months to regain compliance; trading continues on the NYSE with a '.BC' marker. The company warned that delisting could hurt liquidity and its access to capital markets.
Walter agreed to issue 8,650,000 new shares to one noteholder in exchange for $66.725 million of its 8.5% senior notes due 2021, which will be retired and cancelled with no cash received. This extends the debt-for-stock swaps from the 2020 notes to the 2021 notes, and dilutes existing shareholders.
Susquehanna Fundamental Investments, LLC, Susquehanna Capital Group, Susquehanna Securities disclosed a new substantial Walter Energy, Inc. shareholding (5.50% of votes).
Alden Global Adfero BPI Fund, Ltd, Alden Global Opportunities Master Fund, L.P, Alden Global Value Recovery Master Fund, L.P, Turnpike Limited, Alden Global Capital Limited, Alden Global Capital LLC disclosed a new substantial Walter Energy, Inc. shareholding (3.79% of votes).
Walter agreed to issue 3,900,000 new shares plus $5.2 million in cash to two noteholders in exchange for $52 million of its 9.875% senior notes due 2020, which will be retired and cancelled. This is the largest of the 2020-note swaps so far and further dilutes shareholders, while paying cash to retire the notes.
Walter agreed to issue 2,250,000 new common shares to one noteholder in exchange for $25 million of its 9.875% senior notes due 2020, which will be retired and cancelled, with no cash received. This continues the debt-for-stock swaps begun in April 2014 and dilutes existing shareholders somewhat.
14 July 2014security holder rights change● NeutralMajor
On July 14, 2014 Walter issued another $320.0 million of its 9.500% first-lien notes due 2019, bringing the series to $970.0 million (sum of the $450M, $200M and $320M issues). It drew about $298.1 million on its revolver, and used the net note proceeds to repay all revolver borrowings other than letters of credit, ending the lenders' revolving commitments except for those letters of credit. The notes are secured by substantially all assets ahead of the second-lien notes, and the indenture limits dividends. This follows the Seventh and Eighth Amendment conditions (the Eighth Amendment's effectiveness is not confirmed here).
