Pace Industries, LLC, a leading full-service die casting company, has recently inked an agreement with the senior secured lenders for a financial restructuring plan. The comprehensive plan will deleverage the die casting company’s balance sheet. The agreement has gained support from all of the senior secured notes holders and the revolving credit facility lenders. They will provide commitments for nearly $175 million in debtor-in-possession financing to help the company meet its commitments.
Upon implementation of the restructuring plan, the company will obtain necessary financial foundation to resume the normal course of operations following the coronavirus pandemic, gain full benefits of the cost-saving initiatives & recently-executed strategic investments, as well as continue to maintain its position as the leading provider of die cast zinc, magnesium and aluminum components. In order to facilitate and effectuate these crucial changes to its capital structure, the company and its subsidiaries in the U.S. have initiated a voluntary prepackaged process in the United States Bankruptcy Court, District of Delaware.
Pace will convert the existing senior secured notes into 100% equity as per the terms of the prepackaged agreement. Through the support of the noteholders and lenders, the company plans to complete the whole process in the Q2 of 2020 and emerge as a company with stronger financial conditions post the coronavirus outbreak.
According to Scott Bull, Pace Industries’ Chief Executive Officer, the company has assisted the automotive industry to ensure growth and has implemented various cost-saving initiatives for the long-term success of its business. However, the company has been facing various setbacks such as weakened demand and disrupted supply chain due to the coronavirus pandemic. Mr. Bull expressed his confidence in the company to get back on a go-forwards trajectory through these recent actions, and also appreciated the suppliers, customers, employees, and lenders for lending support and assisting the company in realizing its full potential.
Pace has filed various customary motions that are subject to approval from the court to maintain benefit programs and employee wages as well as other financial aspects to return to the normal course of business.