Lazydays RV Center Inc today (Nov. 5) announced that it has received the requisite approvals from its lenders and bondholders to move ahead with its previously announced debt-restructuring plan, which is expected to eliminate all of the company’s $137 million in bond debt, reducing its annual cash interest costs by approximately $16.2 million through the elimination of bond interest payments, a release states.
The Seffner, Fla., dealership’s ongoing cash interest expense will be approximately $3 million incurred on its vehicle financing line, representing a reduction of 84% in annual cash interest expense from a total of $19.2 million prior to the restructuring.
In order to implement this “pre-packaged” restructuring plan, as previously stated, the company today filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court in Wilmington, Del. Because approvals have already been received from its lenders and the requisite percentages of the bondholders, Lazydays’ management expects to move through the court-supervised process quickly. “The prepackaged Chapter 11 is expected to be completed by the end of the year, with minimal disruption to the company’s business and without affecting services to the company’s customers,” the release notes.
“Lazydays will remain open for business as usual and will continue to serve customers in the normal course,” the release explains. “The company will maintain its same commitment to professionalism, customer service and quality. Customer benefits will remain unchanged.”
“We are very pleased to have received approval from our bondholders and lenders for our debt restructuring plan, which will put Lazydays on strong footing to take advantage of our industry leadership position as the economy recovers,” said John Horton, president and CEO. “We intend to move as expeditiously as possible to implement the plan, and we have taken the next step today by initiating the court-supervised process.”
Under the proposed plan, all suppliers will be paid in full — or “unimpaired.”
Accordingly, the company has filed motions seeking authorization from the Court to continue to pay its suppliers under normal terms. Such approvals are routinely granted, Lazydays adds in its release.
“The company currently has adequate cash on hand to satisfy obligations associated with conducting business in the ordinary course,” the release explains. “In addition, the company’s floorplan lenders, Bank of America and Key Bank, have agreed to provide interim funding through the company’s credit facility to support the acquisition of inventory during the restructuring period and have also consented to an amended floorplan agreement that will be effective on confirmation of the plan. The ad hoc committee of bondholders has agreed to invest $10,000,000 into the reorganized Lazydays.
“ The company’s legal adviser is Kirkland & Ellis LLP and its financial adviser is Macquarie Capital (USA) Inc. For more information on the restructuring, visit www.BetterLazydays.com <http://www.betterlazydays.com/> .