Pyxus, majority creditors reach support agreement for exchange transactions

By Wendy Van Sickle

Columbus, Ohio, Jan. 3 – Pyxus International, Inc. and some subsidiaries, including Pyxus Holdings, Inc., entered into support and exchange agreement with a group of creditors, according to a news release.

The creditors include Glendon Capital Management LP, Monarch Alternative Capital LP, Nut Tree Capital Management, LP, Intermarket Corp. and Owl Creek Asset Management, LP on behalf of certain funds managed by them and/or certain of their advisory clients.

These supporting holders hold a total of 99.7% of the loans outstanding under the term loan facility of the company’s Dutch subsidiary; 68.1% of the loans outstanding under Pyxus Holdings’ exit term loan facility; and 64.1% of Pyxus Holdings’ outstanding senior secured notes.

Under the support agreement, the company plans to launch exchange offers to all holders of its secured debt, allowing the holders to swap such debt for newly issued secured debt maturing on Dec. 31, 2027.

If consummated, a significant portion of the company’s secured debt will be replaced with longer dated debt.

Exchange specifics

The exchange transactions will include

• Each holder of the Dutch-subsidiary facility loans being offered the opportunity to exchange all of its loans for an equal principal amount of new senior secured term loans due Dec. 31, 2027 with Pyxus Holdings as the borrower (“new Intabex loans”) and plus additional new Intabex loans in an amount equal to 2% of the principal amount of such holder's exchanged Dutch-subsidiary facility loans on account of the exit fee that would be payable under certain circumstances on the repayment of the Dutch-subsidiary facility loans;

• Each holder of the exit facility loans being offered the opportunity to exchange 40% of its exit facility loans for an equal principal amount of new Intabex loans and 60% of its exit facility loans for an equal principal amount of new senior secured term loans due Dec. 31, 2027 with Pyxus Holdings as the borrower, provided that, if less than all holders of exit facility loans participate in the exchange transactions the amount of new Intabex loans reserved for the non-participating holders will be allocated ratably to the participating holders;

• Eligible holders of the existing notes being offered the opportunity to exchange any and all of their notes for an equal principal amount of new 8½% senior secured notes due Dec. 31, 2027 to be issued under an exchange offer to be conducted by Pyxus Holdings;

• In conjunction with the notes exchange offer, Pyxus Holdings soliciting consents from holders of the existing notes to amend the indenture governing the existing notes, the existing notes and the related intercreditor and security documents as necessary to, among other things, eliminate most of the restrictive covenants and certain of the affirmative covenants, eliminate the change-of-control repurchase obligation in the existing notes indenture, subordinate the existing notes in right of payment to existing and future senior indebtedness, eliminate certain events of default and release all of the collateral securing the existing notes;

• In conjunction with the exit facility loans exchange offer, Pyxus Holdings soliciting consents from holders of the exit facility loans to amend the agreements governing such loans and any related intercreditor and security documents as necessary to, among other things, eliminate most of the restrictive covenants, certain of the affirmative covenants and the mandatory prepayments in the credit agreement governing the exit facility loans, make junior in priority of payment the exit facility loans to the payment in full of the new secured debt and eliminate certain events of default;

• In conjunction with the Dutch-subsidiary facility loans exchange offer, Pyxus Holdings soliciting consents from holders of those loans to amend the agreements governing their loans and any related intercreditor and security documents to, among other things, eliminate most of the restrictive covenants and certain of the affirmative covenants in the credit agreement, make junior in priority of payment the Dutch-subsidiary facility loans to the payment in full of the new Intabex loans and eliminate certain events of default; and

• The company soliciting consents from lenders under the credit agreement governing its asset-based revolving credit facility to amend the agreement and the related intercreditor agreement as necessary to, among other things, modify certain covenants and give effect to and permit the other exchange transactions.

The company has agreed to use its reasonable best efforts to implement and consummate the exchange transactions, and the supporting holders have agreed to exchange their secured debt in the exchange transactions and provide consents in the consent solicitations and under certain existing documents governing the secured debt.

“The exchange transactions will provide us with additional flexibility and extend near-term maturities to December 2027, allowing us to focus on the continued growth of our business and driving stakeholder value,” said Pyxus president and chief executive officer Pieter Sikkel in the release.

Pyxus is a Morrisville, N.C.-based global agricultural company.

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