PaperWorks Industries, Inc. Announces Agreement on Comprehensive Deleveraging and Recapitalization

BALA CYNWYD, Pa., Dec. 21. 2017 /PRNewswire/ -- On December 20, 2017, PaperWorks Industries, Inc. and certain of its affiliates (collectively, the "Company") and five (5) holders of the Company's 9.500% Senior Secured Notes due 2019 (the "Notes"), holding approximately 87% of the outstanding Notes (the "Ad Hoc Group"), entered into a restructuring support agreement (the "RSA") regarding a comprehensive financial restructuring of the Company's debt and equity structure. Among other things, the proposed restructuring will reduce the Company's long term debt by approximately $275 million, which represents approximately 70% of the Company's funded indebtedness, through a repayment of the Company's existing ABL credit facility and an exchange of the Notes for new debt and new common equity in the reorganized Company. Under the RSA, the Company's pro forma capital structure will consist of a $115 million post-restructuring financing facility, inclusive of $70 million of new capital back stopped by the Ad Hoc Group.

"The planned restructuring will establish a strong and sustainable debt and equity structure that will enable us to maximize value for all our stakeholders," said C. Anderson "Andy" Bolton, Chief Executive Officer of the Company. "This restructuring will ensure continuity of supply to the Company's valued customers, protects our vendors and workforce and provides enhanced financial flexibility moving forward. I would especially like to thank our customers, vendors and employees for their patience and support as we move through this process. We are excited to be partnering with our noteholders in the ownership of our business."

As the proposed restructuring is solely focused on the Company's Notes and ABL credit facility, it will not impact the Company's customers, employees, vendors, nor other secured and unsecured creditors. The Company will continue to honor its obligations to such parties in the ordinary course of business with no disruptions.

The Company expects to conclude the restructuring process by the end of March 2018.

The Company is represented by Kirkland & Ellis LLP as legal counsel, Houlihan Lokey Capital, Inc. as investment banker, and Zolfo Cooper, LLC as financial advisor. The ad hoc group of noteholders is represented by Paul, Weiss, Rifkind, Wharton & Garrison LLP as legal counsel and PJT Partners, Inc. as investment banker.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements represent management's current expectations and are based upon information available to the Company at the time of this press release. Statements in this press release that are not historical or current facts are "forward‑looking statements." Such forward-looking statements include statements using words such as "anticipate," "expect," "believe," "continue," "will," "may," "estimate," "assume," "presume," "pursue," "outlook," "plan," "goal," "milestone" and similar expressions. Such statements are subject to a number of risks, uncertainties and assumptions that may cause actual results, developments, or achievements to differ materially from those projected or implied in these statements including, but not limited to, potential restructuring of the Company's outstanding debt and related effects on the holders of its common stock; potential limitations on the Company's ability to maintain contracts and other critical business relationships; risks associated with general economic and business conditions; requirements for adequate liquidity to fund its operations in the future, including obtaining sufficient financing on acceptable terms; other matters related to the potential restructuring and its indebtedness; and the risk factors and known trends and uncertainties described in the Company's most recent periodic reports provided to noteholders.

Accordingly, readers should not place undue reliance on forward-looking statements. The Company does not intend to publicly update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws.

Not an Offer of Securities

This press release does not constitute an offer of securities. Any such offer will comply with all applicable securities laws.

About PaperWorks Industries, Inc.

PaperWorks Industries, Inc. is a leading, integrated North American full-service provider of recycled paperboard and specialized folding cartons for packaging applications serving over 700 clients from seven strategic locations. The Company is committed to the highest sustainable forestry and procurement standards. Product certifications include the Forest Stewardship Council and the 100% Recycled Paperboard Alliance. Additional information can be found at www.paperworksindustries.com.

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SOURCE PaperWorks Industries, Inc.