AMF Bowling Reaches Restructuring Agreement To Significantly Reduce Its Debt And Strengthen Balance Sheet
AMF to Recapitalize Through Consensual "Pre-arranged" Chapter 11 Reorganization
Receives $50 Million Commitment in New Financing to Support Ongoing Operations During Reorganization
AMF Bowling Centers Open and Welcoming Customers
RICHMOND, Va., Nov. 13, 2012 /PRNewswire/ -- AMF Bowling Worldwide, Inc. ("AMF") announced today that it has reached an agreement with a majority of its secured first lien lenders and the landlord of a majority of its bowling centers to restructure through a first lien lender-led debt-for-equity conversion, subject to higher and better offers through a marketing process. AMF's restructuring will proceed on an expedited basis and will result in the elimination of a significant amount of its outstanding debt, providing AMF with the operational flexibility and resources to invest in improvements to its bowling centers and other growth initiatives.
Steve Satterwhite, AMF's Chief Financial Officer and Chief Operating Officer, said, "With the support of our key financial stakeholders, we will recapitalize our balance sheet and reduce our burdensome debt load and related costs. This is a necessary next step in our strategic plan to strengthen AMF financially and operationally for the future. Over the past several years, amid adverse economic conditions that hit our core customer base hard, we continued to strengthen our operations, expand our league and open play offerings, and improve the customer experience. However, we must right-size our capital structure to gain the financial flexibility to improve our bowling centers and make other long-term investments that will help ensure AMF's future profitability and success."
To implement its pre-arranged restructuring, AMF and certain of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division. AMF intends to file a plan of reorganization and related disclosure statement in the near term, as well as a motion seeking Court approval of marketing procedures to solicit higher and better offers as part of the plan. AMF anticipates completing the restructuring process and exiting Chapter 11 within approximately five months.
AMF intends to continue normal business operations during the restructuring, and its bowling centers are maintaining their normal schedules and welcoming customers. Leagues are continuing to bowl as scheduled, and center events and promotions are continuing as planned. AMF expects to continue honoring its customer and league programs and policies, including those pertaining to coupons, gift cards and refunds. It is anticipated that employees will be paid in the normal manner, and all health and other benefits will continue. AMF intends to make timely payment for goods and services received during the reorganization process in the normal course of business and in accordance with the terms of existing agreements.
Fred Hipp, AMF's President and Chief Executive Officer, said, "Over the last several years, Steve and his operations team have worked hard to improve our bowling centers and operations. AMF is now well-positioned to take full advantage of this restructuring. We're committed to making AMF a truly great company, for both the bowling public and our employees."
Satterwhite added, "This legal process provides us with the opportunity to resolve our financial challenges, and it should be virtually seamless going forward for our customers, suppliers and employees. AMF is open for business and our bowling centers are serving customers as usual, with our centers staff focused on providing the best possible bowling experience."
AMF has secured a commitment for debtor-in-possession (DIP) financing from certain of its existing first lien secured lenders for $50 million. Subject to Court approval, these funds will be available to satisfy obligations associated with conducting AMF's business, including payment for goods and services provided after the filing.
AMF has filed customary "First Day Motions" with the Bankruptcy Court, which, if granted, will help ensure a smooth transition to Chapter 11 without business disruption and minimize adverse impact on AMF's employees, customers, suppliers and vendors. The motions are expected to be addressed promptly by the Court.
More information about AMF's restructuring is available at www.AMF.com/restructuring. Court filings and claims information are available at www.kccllc.net/AMF. Information for suppliers and vendors is available toll-free at 1-866-967-0495 or 1-310-751-2695 for callers from outside the U.S. and Canada, or by email at AMFInfo@kccllc.com.
QubicaAMF, in which AMF holds a fifty percent (50%) investment, is not included in the filing and continues to operate outside of the U.S. bankruptcy process, without interruption.
AMF's legal advisors for the Chapter 11 proceedings are Kirkland & Ellis LLP and McGuireWoods LLP, its restructuring advisor is McKinsey & Co., and its financial advisor is Moelis & Company, Inc.
Forward Looking Statements:
Certain statements in this press release constitute "forward-looking statements." All statements other than statements of historical facts included herein, including those regarding our future financial position and results, business strategy, plans, and objectives of management for future operations, are forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause our actual results, performance or achievements, or industry results, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding our present and future business strategies and the environment in which we will operate in the future. Although we believe that the expectations reflected in the forward-looking statements are reasonable at the time made, we cannot guarantee future results, levels of activity, performance, or achievements.
About AMF Bowling:
AMF is the world's largest owner and operator of bowling centers. Since the introduction of the automated pinspotter in 1946, AMF has been a leader in the bowling industry. More than 20 million bowlers per year make AMF their bowling destination of choice. AMF is where America goes bowling.
AMF Bowling Centers, Inc.
Kekst and Company
SOURCE AMF Bowling Worldwide, Inc.