Washington Prime Group Inc. on Oct. 21 emerged from Chapter 11, the company announced.
The bankruptcy court in Houston confirmed the company's reorganization plan Sept. 3.
The company filed for Chapter 11 on June 14 in bankruptcy court in Houston, saying it entered into a restructuring support agreement with creditors, led by SVPGlobal, holding about 73% of its secured debt and 67% of its outstanding notes.
The company's initial plan was facing a valuation challenge from the official committee of equity holders that had been named on the case, but the company reached a settlement with the panel in late August to increase the recovery for preferred shareholders and to open the plan's rights offering to certain equity holders.
Under the plan, holders of claims under the company's 2015 and 2018 credit facilities and its Weberstown facility would receive a combination of take-back debt (a $1.212 billion, four-year exit term loan with interest at L+500 for the first six months, L+600 for the next 18 months and L+750 thereafter, with a 0.75% Libor floor) and cash, for a recovery estimated at 100%.
Meanwhile, unsecured noteholders are to receive 100% of the equity in the reorganized company, along with rights to purchase new common equity under a contemplated rights offering of $260 million to $325 million at a 32% discount to a set-up equity value of $800 million, with both subject to certain elections made by preferred and common equity holders, detailed below. The unsecured noteholder recovery rate is 39.6% to 46.5% based on the set-up value.
Finally, preferred holders are slated to receive $35 million in cash, and common equity holders are to receive $20 million. Preferred equity holders can elect to receive 6.0625% of the equity in the reorganized company, while common shareholders can elect to receive 3.0625% of the new equity.
In addition, certain equity holders that are eligible participants and that elect to receive equity in lieu of cash would also be able to purchase a pro rata share (with oversubscription rights) of 6.125% of the minimum allocation in the equity rights offering under the proposed reorganization plan, which, according to the company's supplemental disclosure statement, would translate to roughly $7.96 million of the $130 million allocated to backstop parties at the low end of the contemplated rights offering.
Kirkland & Ellis served as legal counsel to the company, Alvarez & Marsal served as restructuring adviser, and Guggenheim Securities served as the company's investment banker. Davis Polk & Wardwell served as legal counsel and Evercore Group LLC served as investment banker and financial advisor to SVPGlobal. Wachtell Lipton Rosen & Katz served as legal counsel and PJT Partners served as investment banker for an ad hoc group of consenting creditors.
