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Court Approves Cenveo Reorganization Plan; BofA to Agent $175MM Exit Financing

August 20, 2018, 08:00 AM
Filed Under: Printing

Cenveo, Inc., a diversified manufacturer of print-related products including envelopes, custom labels, commercial print, and publisher solutions,  announced that the United States Bankruptcy Court for the Southern District of New York has confirmed its plan of reorganization, paving the way for the Company to emerge from Chapter 11 in the coming weeks.

The terms of the Plan will enable the Company to exit Chapter 11 with a substantially deleveraged balance sheet and increased liquidity, allowing the Company to focus on its operations and grow its businesses.  Prior to filing for Chapter 11, the Company's liabilities included approximately $1.1 billion in funded debt.  Upon emergence, the Company's funded debt will be reduced by over $800 million to approximately $325 million.

The Company commenced solicitation of votes for approval of its Plan earlier this summer and Cenveo's Plan was approved by an overwhelming majority of its entire creditor body.  Approximately 97% of Cenveo's first lien secured noteholders (the "First Lien Holders"), 100% of its second lien noteholders, including the largest holder, Brigade Capital Management, and approximately 91% of general unsecured creditors all voted to approve Cenveo's Plan.  These numbers represent overwhelming support from Cenveo's creditors for the Plan.

The Plan was the result of the Company's global settlement with its various creditor groups and the Unsecured Creditors' Committee, including the Pension Benefit Guaranty Corporation, certain unions, and the indenture trustee for the unsecured noteholders.

Upon its emergence from Chapter 11, the Company will be privately held with its largest shareholders comprised of institutional investors with tens of billions of dollars of capital under management. Additionally, the Company has entered into a commitment for a $175 million asset based revolving credit facility and is expected to only have approximately $68 million used upon emergence creating $65 million of liquidity when coupled with the expected cash on hand on the emergence date. According to a court filing Bank of America is serving as the administrative and collateral agents for the ABL Exit Facility.

The Company was advised by Kirkland & Ellis LLP as legal counsel, and Greenhill & Co., Rothschild Inc. and Zolfo Cooper, LLC as investment bankers and financial advisors.

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