ATLANTA--(BUSINESS WIRE)--Aquilex Holdings LLC (“Aquilex” or the “Company”) today announced that, pursuant to its previously announced voluntary exchange offer (the “Exchange Offer”) for its outstanding 11⅛ Senior Notes due 2016 (the “Senior Notes”), as of 5:00 p.m., New York City time, on Friday, January 27, 2012, the Company received valid tenders from holders of $221,253,000 principal amount of the Senior Notes, representing approximately 98.33% of the $225 million outstanding principal amount of the Senior Notes.
The Company also announced that, with the consent of the administrative agent for the Company’s existing senior secured credit facility and holders of two-thirds of the Senior Notes, pursuant to the terms of the restructuring support agreement that the Company entered into on December 23, 2011, it has waived the minimum percentage of the Senior Notes required to be tendered in the Exchange Offer in order to satisfy the conditions to consummation of the Exchange Offer. As a result, all of the conditions to the consummation of the Exchange Offer have been satisfied and the Exchange Offer has expired. The Company expects to consummate the Exchange Offer, the related Rights Offering and its overall restructuring transaction no later than Friday, February 3, 2012. In connection with the Rights Offering, the holders of its Senior Notes will invest $80 million of new capital into the Company.
Once completed, the restructuring will reduce Aquilex’s outstanding debt by 70%, or approximately $318 million, and debt service costs will decline by 69% to approximately $13 million annually. This reduction in debt and associated interest payments, coupled with the Company’s cash position of $36.5 million as of Friday, January 27, 2012, and new $50 million revolving credit facility, significantly bolsters the Company’s balance sheet and improves its capital structure. In conjunction with the completion of the restructuring, affiliates of Centerbridge Partners, L.P. will be the controlling shareholder of Aquilex.
Bill Varner, President and Chief Executive Officer of Aquilex, said, “We are pleased that we will shortly complete our Exchange Offer and Rights Offering. Upon closing, with our improved capital structure we will have the financial flexibility necessary to invest in the business to better serve our customers, and we will remain a solid partner with our vendors.”
The Exchange Offer and the related Rights Offering were commenced on December 23, 2011, pursuant to a restructuring support agreement entered into by the Company and holders of its first lien debt, second lien debt, Senior Notes and equity interests. During the restructuring process, all trade creditors have received, and will continue to receive, payment in full in the ordinary course.
Rothschild Inc. is acting as financial advisor and investment banker and Richards, Layton & Finger is acting as legal advisor to Aquilex in connection with the restructuring. Alvarez & Marsal is acting as restructuring advisor to the Company.
Aquilex Holdings LLC is the parent of Aquilex Corporation, a leading provider of critical maintenance, repair and industrial cleaning solutions to the energy industry. Through our divisional and branch offices in the United States, Europe and the Middle East, we provide our services to a diverse global base of over 600 customers, primarily in the oil and gas refining, chemical and petrochemical production, fossil and nuclear power generation and waste-to-energy industries.
Important Information About The Restructuring
The new securities issued pursuant to the financial restructuring transaction have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws. Therefore, the new securities may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and any applicable state securities laws.
This news release does not constitute an offer to sell or buy, nor the solicitation of an offer to sell or buy, any securities referred to herein, nor is this news release a solicitation of consents to or votes to accept any Chapter 11 plan. Any solicitation or offer will only be made pursuant to an offering memorandum and disclosure statement and only to such persons and in such jurisdictions as is permitted under applicable law.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements can be identified by the use of forward-looking terminology such as “expect,” “will,” “would,” “likely,” “anticipate,” “look forward,” “upon,” or the negative thereof or comparable terminology, in addition to all statements with respect to Aquilex’s expectations for the potential restructuring of Aquilex’s indebtedness, for any consents or agreements to be obtained from Aquilex’s creditors and the closing of the restructuring. These statements are not historical facts and represent only Aquilex’s beliefs regarding future events, and you are cautioned that Aquilex’s business, operations and any potential debt restructuring are subject to a variety of risks and uncertainties, many of which are beyond Aquilex’s control. Consequently, actual events may differ materially from those projected by any forward-looking statements. Factors that could cause actual events to differ materially from those projected include, but are not limited to, risks and uncertainties surrounding the eventual outcome of any restructuring of the Company’s debt, including but not limited to Aquilex’s ability to successfully reduce the principal amount of certain of its existing debt, obtain necessary creditor consents or court approvals for any restructuring plan and access sufficient sources of liquidity; risks and uncertainties relating to potential litigation in connection with the restructuring; and risks and uncertainties regarding any adverse effect the restructuring may have on the manner in which the Company is perceived by the markets and its creditors, customers, vendors and employees. These factors also include the risks and uncertainties described under “Item 1A. Risk Factors,” in Aquilex’s 2010 Annual Report on Form 10-K, as filed with the SEC on March 31, 2011; and under “Part II, Item 1A. Risk Factors,” and “Cautionary Statement Regarding Forward-Looking Statements,” in Aquilex’s Quarterly Report on Form 10-Q, for the third quarter of 2011, filed with the SEC on November 14, 2011. Aquilex’s forward-looking statements contained herein speak only as of the date hereof, and the Company makes no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made. If the Company does revise or update one or more forward-looking statements, you should not conclude that it will make additional revisions or updates with respect thereto or with respect to the other forward-looking statements, except as required by law.