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Recapitalization & Restructuring Select Case Studies
Click on tombstones below to read complete case studies.   Trusted advisor to Centro Properties GroupOn March 1, 2011, Centro Properties Group (“Centro” or “CNP”), Australia’s largest manager of retail property investment syndicates with 123 shopping centers in its Australian portfolio as well as 600 retail locations in the United States, announced the sale of its U.S. assets and platform, and intention to pursue a debt restructuring and a potential merger of its Australian interests. CNP and its managed funds entered into a binding stock purchase agreement to sell the Centro U.S. platform to BRE Retail Holdings, LLC, an affiliate of Blackstone Real Estate Partners VI, L.P. for an enterprise value of approximately $9.4 billion. Proceeds will be used to repay debt in accordance with CNP’s existing Stabilization Agreement.
On August 9, 2011, Centro announced that it had entered into an Implementation Agreement which sets out the terms of a restructuring proposal as agreed between more than 83% of CNP’s senior lenders as well as three funds in which CNP manages and holds investment interests: Centro Retail Trust (“CER”), Direct Property Fund (“DPF”) and Centro Australia Wholesale Fund (“CAWF”). The proposal involves a A$5.0 billion merger of the Centro Group’s Australian assets in conjunction with the cancellation of CNP’s senior debt of A$3.4 billion.
Moelis & Company brought together an integrated team of professionals in the U.S. and Australia with backgrounds in Restructuring, Mergers and Acquisitions and Real Estate to drive effective results. Moelis & Company acted as joint sale advisor to Centro on the sale of its U.S. interests and continues to act as restructuring advisor to CNP.   Trusted advisor to Beazer Homes USAMoelis & Company has served as financial advisor to Beazer Homes USA, Inc. (“Beazer,” NYSE: BZH), one of the country’s 10 largest single-family homebuilders, in its recapitalization efforts since April 2009, which has resulted in enhanced financial flexibility and allowed the company to continue to pursue growth opportunities.
On September 3, 2009, Beazer announced the pricing of $250 million of new 12.0% senior secured notes due 2017. The B1/CCC+ notes were issued at a price of 89.5% of par to yield 14.215%. Net proceeds from the offering were used to fund, or replenish cash that had been used to fund, open-market repurchases of Beazer’s outstanding senior notes, totaling over $370 million in principal amount. This transaction was a key step in providing cushion to the company’s tangible net worth covenant and extending its pending debt maturities. Moelis & Company acted as co-manger on the transaction.
On January 6, 2010, Beazer executed a concurrent $103 million common stock and $58 million mandatory convertible note offering. The anticipated two-day marketing process was shortened to a single day, and the common stock offering was upsized from 18.0 million to 19.5 million shares due to strong investor demand. Moelis & Company acted as co-manager on the transaction.
On May 3, 2010, Beazer executed a concurrent offering of $73 million common stock, $75 million Tangible Equity Units and $300 million senior unsecured notes. Beazer raised approximately 36% of its pre-launch market value, half in the form of common equity and half in the form of Tangible Equity Units. During the one-day marketing process, while the Dow and the S&P 500 declined 2.0% and 2.4%, respectively and the homebuilding index decreased 3.4%, the equity offering successfully priced at a 15.6% discount to the prior-day market close and the senior notes priced in the middle of the expected range. Moelis & Company acted as co-manager on the transaction.   Trusted advisor to Wind Hellas NoteholdersMoelis & Company has advised the Ad Hoc Committee of Senior Secured Noteholders (“SSNs”) on two highly successful restructurings of Wind Hellas Telecommunications (“Wind Hellas”) within a 12 month time-frame.
On November 27, 2009 Wind Hellas completed its first financial restructuring by way of the largest ever UK ‘prepack’ administration share sale from holding company Hellas II to a new company owned by existing sponsor Weather Investments. The share transfer eliminated €1.4 billion of Subordinated and PIK Notes from the new group, out of a €3.3 billion pre-transaction debt structure, reducing leverage and saving over €100 million in annual interest costs. Additionally a €50 million net equity injection by the acquirer was secured, further improving liquidity and financial stability and allowing the business to invest in its mobile and fixed network to support its growth plan. The price of the SSN’s in the secondary market increased from the mid-70s at the outset of the restructuring to the mid-90s following completion of the transaction, representing a significant improvement in value. Moelis & Company acted as financial advisor to the Ad Hoc Committee of SSNs, representing a majority in value of the €1.2 billion issue, the largest creditor tranche in the group.
Following completion of the transaction, performance at Wind Hellas deteriorated as a result of the onset of the Greek economic crisis and heightened market competition. The decline led the company to approach its lenders with a view to negotiate a further optimization of its capital structure. Moelis & Company acted as financial advisor to the Ad Hoc Committee of SSNs, which again represented a majority in value of the €1.2 billion issue.
On December 16, 2010 Wind Hellas completed its second financial restructuring by way of a UK ‘pre-pack’ administration share sale from holding company Weather Finance III to a new company owned by the SSNs. As a result of the restructuring, the new owners invested €420 million in order to repay senior debt and fund Wind Hellas’ long term development and business plan.
Wind Hellas was released of its previous material debt obligations, totaling €1.9 billion. Through a complete de-leveraging, saving an estimated €129 million in annual cash interest payments, and significant new investment, the company has been well placed to capitalize on its strategic competitive advantages and extend its footprint in the Greek telecom market.  Financial advisor to the Ad Hoc Committee of Bondholders of Chemtura Corporation on its $2.7 billion Chapter 11 ReorganizationOn November 10, 2010, Chemtura Corporation (“Chemtura,” NYSE: CHMT), a global manufacturer of specialty chemicals, successfully emerged from Chapter 11 bankruptcy with indebtedness reduced from $1.3 billion prepetition to $750 million post-emergence. The court confirmed a Plan of Reorganization which resulted in bondholders receiving a 100% recovery, including post-petition interest and Make-Whole/No-Call damage claims, through the issuance of cash and 95% of the reorganized company's equity to all unsecured creditors. The Plan of Reorganization was the result of intensive negotiations with the Debtors and was confirmed over the strong objection of certain other stakeholders in a highly litigated confirmation hearing. Moelis & Company represented the Ad Hoc Committee of Bondholders, which collectively owned an overwhelming majority of the unsecured bonds.   Financial advisor to Aleris International on its $2.7 billion Chapter 11 ReorganizationOn June 1, 2010, Aleris International Inc. (“Aleris"), a global leader in the production and sale of aluminum rolled and extruded products, recycled aluminum and specifications alloy manufacturing, emerged from Chapter 11. Aleris and its wholly-owned U.S. subsidiary co-debtors filed petitions for voluntary reorganization under Chapter 11 on February 12, 2009, as a result of financial constraints related to the deteriorating global economic situation, declining industrial demand and a swift drop in aluminum prices. Moelis & Company guided Aleris through a highly complex bankruptcy process that involved filing a voluntary petition for relief under Chapter 11 in the U.S. bankruptcy court for its German holding company subsidiary. Aleris' innovative plan of reorganization received substantial support from its U.S. and European creditor groups and was confirmed in May 2010. Moelis & Company acted as exclusive financial advisor to Aleris and helped the company raise over $2.2 billion of capital over the course of the bankruptcy process.   Financial advisor to the Ad Hoc Group of First Lien Lenders of LyondellBasell on its $24.0 billion Chapter 11 Reorganization On April 30, 2010, LyondellBasell Industries N.V. (“LyondellBasell,” NYSE: LYB), the world’s third largest independent chemical company based on revenues, successfully emerged from Chapter 11 bankruptcy. The company voluntarily filed for Chapter 11 bankruptcy, resulting from a sudden loss of liquidity caused by the rapidly deteriorating economic environment, in January 2009. Moelis & Company served as financial advisor to the Ad Hoc Group of First Lien Lenders and participated in all aspects of the restructuring process, including leading business due diligence, analyzing alternative plan structures, structuring the rights offering, evaluating exit financing structures, negotiating settlements with other creditor constituencies and assisting in the development and negotiation of the plan of reorganization. Additionally, Moelis & Company was integral in negotiating and structuring LyondellBasell’s $2.8 billion rights offering that was backstopped by members of the Ad Hoc Group as well as the $7.2 billion exit financing. Moelis & Company also acted as the Ad Hoc Group’s principal advisor in connection with negotiating the $6.5 billion Debtor-in-Possession (“DIP”) Term Loan, assembling one of the largest DIP financings ever during a period of great uncertainty in the credit markets.   Financial advisor to the Ad Hoc Steering Committee of €1.1billion CMBS Noteholders of Fleet Street Finance Two on its financial restructuringOn February 24, 2010, Fleet Street Finance Two P.L.C. (“FSF2”) completed its debt restructuring and consequently became the first Commercial Mortgage Backed Securities (“CMBS”) Issuer in Europe to achieve an extension of the legal final maturity of its CMBS. FSF2 had issued its CMBS in 2006 as part of a €3.5 million financing of the properties of German retailers Karstadt and Quelle (“K&Q”). However, in the summer of 2009 K&Q became insolvent and a complex restructuring was required to avoid a liquidation. Moelis & Company acted as financial advisor to the Ad Hoc Committee of the €1.1 billion CMBS Noteholders of FSF2 in a deal that involved extending the CMBS maturity to stabilize the capital structure and allow Karstadt to exit insolvency and be sold to a new investor. In return for the extension, CMBS noteholders benefitted from increased margin, improvement of the cashflow waterfalls including increased amortization of the senior CMBS tranches and various structural enhancements which were implemented to defend the CMBS credit ratings. This was one of the first CMBS deals to be fully restructured in what is, following the explosion in structured finance deal size and complexity that took place during the credit boom, a new and intricate sector for European restructuring.  Trusted advisor to YRC Worldwide Inc.On December 31, 2009, YRC Worldwide Inc. (“YRC,” Nasdaq: YRCW) completed a $470 million debt-for-equity exchange offer, which resulted in a significantly improved liquidity profile. On February 23, 2010, Moelis & Company executed a private placement of $70 million of 6% Convertible Senior Notes. Proceeds from the issuance were used to satisfy the remaining amounts outstanding on the company’s 8 1/2% Guaranteed Notes due April 15, 2010, with excess proceeds available to be used for general working capital purposes. The two transactions were part of a broad restructuring effort which also included ABS facility, credit facility and union agreement amendments and provided YRC with runway to execute its business plan. Moelis & Company acted as financial advisor, joint lead dealer manager and joint lead placement agent on the transactions and continues to serve as financial advisor on YRC’s broader restructuring efforts. |
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News Feed- Ken Moelis on Bloomberg TV
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- Moelis & Company Announces the Appointment of Christopher Riley as Managing Director as the Firm looks to expand into GermanyMoelis & Company today announced the appointment of Christopher Riley as a Managing Director, based in Germany, who will be responsible for advising clients in the German speaking region.
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