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Strategic Materials Enters Restructuring to Reduce Total Debt by Over $300MM

December 05, 2023, 07:35 AM
Filed Under: Bankruptcy

North America's largest glass recycler, Strategic Materials, Inc. (SMI), announced a comprehensive restructuring to position the business for long-term growth.

SMI and certain of its U.S. domestic subsidiaries have filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of Texas (the "Court"). During the restructuring, the Company intends to operate in the ordinary course of business without disruption. The Company's Canadian and Mexican based operating affiliates are not part of the chapter 11 bankruptcy process.

SMI has secured new money commitments of $23 million, subject to Court approval, for a debtor-in-possession (DIP) financing facility from existing lenders to support its business operations. The facility will allow SMI to continue meeting its obligations across the entire enterprise ? including to customers, suppliers, and employees ? while financially restructuring and reorganizing the business, including deleveraging the balance sheet by over $300 million.

The restructuring will enable the business to grow and operate sustainably and continue to deliver high-quality products while maximizing value for all stakeholders. The Company has filed certain customary "First Day" motions with the Court to ensure operations continue without interruption. All employees will continue to receive pay and benefits, and suppliers of goods and services will be paid in the ordinary course.

"We play a critical role for the customers and communities we serve," said Chris Dods, the Chief Executive Officer of Strategic Materials. "The past several years presented significant operational and financial challenges, requiring a comprehensive restructuring of the balance sheet of the Company. We are grateful for the demonstration of confidence in our underlying business, represented by substantial new financing committed from the lender group."

Strategic Materials is being advised by Moelis & Company, LLC as investment banker, Alvarez & Marsal, as restructuring advisor, and Vinson & Elkins LLP and Wachtell, Lipton, Rosen & Katz as legal counsel.


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