Phoenix Services reaches restructuring agreement, eyes mid-year exit

By Angela McDaniels

Tacoma, Wash., March 16 – Phoenix Services LLC has reached an agreement with an ad hoc group of lenders for a restructuring and expects to emerge from Chapter 11 mid-year, according to a company news release.

The company plans to file a disclosure statement and plan of reorganization on or around March 31.

Phoenix said the restructuring will reduce more than $500 million of funded debt and includes $45 million of new money to invest in the business.

The group of lenders represent about 78% of the company's debtor-in-possession debt facility and about 76% of its other pre-petition secured debt.

The restructuring is expected to reduce net leverage to about 2 times on a pro forma basis.

The company said its pro forma debt will include partial PIK-pay interest to position it to generate cash flow, reinvest in existing customer sites and pursue new growth opportunities.

The company said the timeline will allow its management team to finalize new contracts with existing customers ahead of the bankruptcy court's consideration of the plan of reorganization and disclosure statement.

Radnor, Pa.-based Phoenix Services is a provider of outsourced slag handling, metal reclamation and complementary services to steel mill customers. The company filed bankruptcy on Sept. 27 under Chapter 11 case number 22-10906.

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