NPC gets court approval of rights offering, backstop commitment deal

By Sarah Lizee

Olympia, Wash., Oct. 20 – NPC International, Inc. obtained court approval of a rights offering and entry into a backstop agreement, according to a minute entry filed Tuesday with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the debtors initiated the Chapter 11 cases with an executed restructuring support agreement, which currently provides for support of creditors holding about 92% of priority term loans and 88% of first-lien term loans, representing a supermajority of the debtors’ two secured voting classes under the plan, as well as 53% of the second-lien term loans.

The RSA and plan call for either by a sale of one or both of the debtors’ businesses or by a toggle reorganization of the company as a going concern around an optimized restaurant footprint.

In the event the company toggles to a reorganization transaction, the plan provides for a new money rights offering under which eligible holders of allowed first-lien secured claims will receive subscription rights to purchase a number of newly issued shares of convertible participating preferred stock issued by the reorganized NPC parent in an aggregate amount of up to $150 million.

To assure that the necessary funding is obtained through the rights offering, the debtors and the backstop parties, which includes certain members of the ad hoc priority/first-lien group, finalized the form of a backstop commitment agreement, under which the backstop parties have committed to fully backstop the rights offering.

Leawood, Kan.-based NPC is a restaurant franchisee. The company filed bankruptcy on July 1 under Chapter 11 case number 20-33353.

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