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American Commercial Lines Files Bankruptcy; Wells Fargo Capital Finance Agents DIP

February 10, 2020, 09:05 AM
Filed Under: Bankruptcy

American Commercial Lines Inc. announced that it has taken the next step to implement the "pre-packaged" plan to recapitalize the business, significantly reduce the Company's debt under its previously announced Restructuring Support Agreement (the "RSA") and materially increase its liquidity. As expected and as contemplated by the RSA, ACL has voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas, Houston Division (the "Court").

ACL's operations are continuing as normal. Upon emergence, ACL will continue to provide customers with competitive and reliable barge transportation services.

Mark Knoy, President and Chief Executive Officer of American Commercial Lines, said, "Today we are moving forward with our pre-packaged plan to recapitalize the business, significantly reduce the Company's debt and materially increase our liquidity, which we believe will allow us to focus more of our resources on competing in the marketplace and investing in the business to support future growth. Because we already have the support of a substantial majority of our term loan lenders, we expect to move through this process very quickly."

Mr. Knoy continued, "In recent days we have reached out to many of our customers, vendors and other partners, and we appreciate the many expressions of support and confidence they have conveyed to us.  I also want to thank our dedicated teammates for their continued hard work and focus on working safely. We look forward to continuing to provide the safest, most cost-effective and environmentally friendly barge transportation solutions."

As previously announced on February 4, 2020, the Company has entered into a RSA with holders of a substantial majority of its term loan lenders on a "pre-packaged" plan to recapitalize the business, significantly reduce the Company's debt and substantially increase the Company's liquidity. Under the terms of the RSA, ACL will receive $200 million in new equity capital to support liquidity and investments in the business. In addition, the RSA provides for a reduction of funded debt by approximately $1 billion.

ACL has received a commitment for debtor-in-possession financing consisting of a $640 million asset based loan and a $50 million term loan from certain of its existing lenders. Upon Court approval, the new financing and cash generated from the Company's ongoing operations will be used to pay off ACL's existing ABL and to support the business during the court-supervised process.

The Company has filed a number of customary motions seeking court authorization to continue to support its operations during the expedited court-supervised process, and employee wages and benefits will continue to be paid in the ordinary course. The Company intends to seek to pay suppliers in full under normal terms for all goods and services. Under terms of the pre-packaged plan, which is subject to Court approval, general unsecured pre-petition claims will be paid in full in the ordinary course.

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