United Site Services, the largest national provider of portable sanitation services and complementary site solutions in the United States, has entered into a restructuring support agreement (the "RSA") with an ad hoc group of its existing lenders (the "Ad Hoc Lender Group") and the Company's ABL and revolving facility lenders to implement a comprehensive restructuring transaction that will reduce its funded debt levels, strengthen its balance sheet, and build enduring, long-term financial stability. To implement the transaction, United Site Services has filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the District of New Jersey.
Throughout this process, the Company will maintain normal operations without disruption and continue to deliver high-quality site services to customers.
"We've been transforming how site services are performed by setting best practice standards for over 25 years—this milestone ensures we continue leading the industry for the long run," said Bobby Creason, Chief Executive Officer. "This process will strengthen our foundation: reducing our net debt, providing a significant amount of new capital to invest in our people and operations, and giving our Company the financial flexibility to lead from strength. Going forward, our Company will be bolstered by $1.1 billion in new capital, including $480 million of equity committed by our existing financial stakeholders, demonstrating their continued support of our business and its long-term success. I thank our dedicated employees, our loyal customers and partners, and our supportive lending partners."
The Company has received commitments for $120 million in debtor-in-possession financing from members of the Ad Hoc Lender Group, which will be used to maintain normal business operations, including payments to employees and trade creditors, and support the business through the Chapter 11 process.
In line with the RSA, the Company has begun to solicit votes on a pre-packaged plan of reorganization and has obtained the support of more than 75% of voting creditors. Upon confirmation, existing lenders who have signed the RSA will fund a $480 million equity rights offering, a $300 million term loan, and existing banks will provide a $195 million 5-year ABL credit facility and a separate $100 million 5-year revolving credit facility, reflecting strong stakeholder support for the proposed restructuring.
The Company expects to seek confirmation of the plan of reorganization and emerge from Chapter 11 within a timely manner. United Site Services will emerge under the majority ownership of the Ad Hoc Lender Group, with a healthy and more sustainable financial structure to drive long-term growth.
The Company has filed "first day" motions to obtain the requisite court authority for the Company to continue operating its business in the ordinary course without disruption to its customers, vendors, suppliers, or employees. As part of these first day motions, the Company has sought court approval to continue to pay all valid amounts owed to vendors and suppliers as they come due as well as the authority to make timely payments to vendors, suppliers, and other trade creditors in full under normal terms for goods and services delivered before the filing. In addition, the Company expects that employees will continue to receive their usual wages and benefits without interruption.
United Site Services is advised in this matter by Milbank LLP as legal counsel, PJT Partners as investment banker, Alvarez & Marsal as financial advisor, and FTI Consulting as communications advisor. The Ad Hoc Lender Group is advised by Akin Gump Strauss Hauer & Feld LLP as legal counsel and Centerview Partners LLC as financial advisors.