An agreement was reached with financial stakeholders including bondholders holding more than 85% of the outstanding senior unsecured notes due in 2025 to support plans to stabilise the business.
Company founder Jim Neff will reinvest money alongside bondholders and other financial partners with the agreement ensuring WGA can continue to operate without disruption.
To implement the plan, WGA has filed for voluntary protection under Chapter 11 of the US Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware.
WGA is entering the process with a commitment of more than $77 million of debtor-in possession financing from Neff and investors to support operations through Chapter 11.
The agreement reached with investors is confirmed in a Restructuring Support Agreement (RSA) and once the reorganisation is implemented, WGA’s debts will be reduced by over $450 million, inject significant new capital and strengthen the company.
The RSA will achieve goals including deleveraging the balance sheet by 86% and partnering with new investors.
These developments follow Neff making a substantial investment in June when he purchased $115 million of outstanding senior secured debt for $45 million and he has agreed to forego some of the statutory rights that he would otherwise maintain as the holder of the debt and pass on the $70 million benefit to the other stakeholders.
Neff says, “The plan we have outlined in the RSA reflects my continued dedication to and belief in WGA, along with the overwhelming support of our key financial stakeholders. I am confident that this plan will tremendously strengthen our financial position and ensure a better future for WGA, our people, and our customers.”