Boomerang Tube files plan and disclosure based on support agreement

By Caroline Salls

Pittsburgh, July 1 – Boomerang Tube, LLC filed its plan of reorganization and related disclosure statement June 30 with the U.S. Bankruptcy Court for the District of Delaware.

As previously reported, the company, its term loan lenders, some bridge facility lenders, its ABL facility lenders and majority interestholder Access Tubulars, LLC entered into a plan support agreement last month.

Under that agreement, Boomerang’s funded debt will be reduced by converting $214 million in outstanding principal of term loan facility obligations into 100% of the new common stock in a new holding company.

The agreement also calls for payment of a backstop exit fee and exit closing fee equal to 20% of equity of the new holding company common stock and the issuances of equity under a management incentive plan not to exceed 5% of the total outstanding equity of the new holding company.

In addition, the reorganized company will issue $55 million of subordinated notes secured by a third-priority lien on ABL collateral and term collateral.

Creditor treatment

Treatment of creditors under the proposed plan will include:

• Holders of ABL facility claims and debtor-in-possession ABL facility claims will either receive a share of interests in an ABL exit facility if the ABL exit lenders are the same as the ABL DIP lenders, or be paid in full in cash;

• Holders of DIP term facility claims will be paid in full in cash;

• Holders of term loan facility claims will receive a share of 100% of common stock in a new holding company, subject to dilution, 100% of the subordinated notes and payment in full in cash of outstanding professional fees and expenses;

• Holders of SBI secured claims will receive a promissory note issued by a new operating company, which will have an original principal amount of the holder’s share of $4 million, have an interest rate of 4% and mature on the seventh anniversary of the plan effective date;

• Treatment of general unsecured claims is to be determined;

• Intercompany claims and intercompany interests will be left unaltered, except for those cancelled as mutually agreed to by the holder and the company; and

• All existing equity securities issued by Boomerang will be cancelled, and holders will receive no distribution.

Exit financing

Boomerang said its up to $75 million exit ABL facility will accrue interest at Libor plus 450 basis points and mature on Aug. 11, 2017.

Meanwhile, the company’s $60 million new money senior secured term loan facility will accrue interest at Libor plus 1,000 bps and will mature 57 months from the plan effective date.

The term facility will have a no call provision for two years, will be callable at 107.5% in year three, 103.75% in year four and par thereafter.

In addition, Boomerang will issue $55 million in five-year subordinated notes. The subordinated notes facility will accrue interest at Libor plus 1,750 bps.

Boomerang Tube is a St. Louis-based producer of oil country tubular goods and line pipe that filed for bankruptcy on June 9. The Chapter 11 case number is 15-11247.

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