Pyxus International, Inc. Successfully Completes Financial Restructuring

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Aug 24, 2020, 19:17 ET

Emerges from Chapter 11 with Debt Reduced by More than $400 Million

Enhanced Financial Flexibility to Fuel Ongoing Business Transformation and Drive Value Creation

MORRISVILLE, N.C., Aug. 24, 2020 /PRNewswire/ -- Pyxus International, Inc. ("Pyxus" or "the Company"), a global value-added agricultural company, announced today that the Amended Joint Prepackaged Chapter 11 Plan of Reorganization of Pyxus International, Inc. and Its Affiliated Debtors (the "Plan") confirmed by the United States Bankruptcy Court for the District of Delaware on August 21, 2020 has become effective. As a result, Pyxus has successfully completed its financial restructuring and emerged from Chapter 11 with its debt reduced by more than $400 million and maturities extended.

"Over the last two months, we have been keenly focused on enhancing the Company's financial flexibility, and the completion of our financial restructuring process is a significant step forward," said Pieter Sikkel, Pyxus' President and CEO. "We are now a stronger and more competitive company with a foundation that bolsters our position in targeted markets and enables us to drive long-term value for all of our stakeholders. I want to thank our exceptional team at Pyxus for their commitment and continued focus through this process. We are also grateful for the support of our vendors, suppliers, customers and partners and we look forward to working together for years to come."

Under the terms of the Plan, Pyxus has completed a comprehensive balance sheet restructuring that includes but is not limited to extending the maturity of its existing first lien debt, eliminating $635 million in principal amount of existing second lien debt, while adding a $213 million exit term loan, which replaced the debtor-in-possession financing incurred in connection with the Chapter 11 cases, and a $75 million exit asset based revolving facility. The elimination of the second lien debt and access to new working capital lines of credit, including foreign credit facilities, substantially strengthens the Company's balance sheet.

Pursuant to the Plan, in connection with the effectiveness of the Plan, a series of corporate transactions were completed which resulted in the Company being a new corporation renamed Pyxus International, Inc., which through its subsidiaries continues to operate the Company's businesses, while the corporation formerly known as Pyxus International, Inc. has changed its name to Old Holdco, Inc. Upon the effectiveness of the Plan, all outstanding shares of Old Holdco, Inc. were cancelled.

The investment in the Company's exit term loan facility is being led by Glendon Capital Management L.P. and Monarch Alternative Capital LP. Collectively, Monarch and Glendon will own a majority of the new equity in the Company.

In accordance with the Plan, the Company's board of directors is comprised of three members, consisting of Mr. Sikkel, along with Patrick Fallon, Principal at Monarch, and Holly Kim, Partner at Glendon.

"We see tremendous opportunity for a delevered Pyxus," said Ms. Kim. "We are excited to work with the management team going forward to unlock the Company's full potential."

Simpson Thacher & Bartlett LLP served as legal counsel, and Lazard and RPA Advisors served as financial advisors to Pyxus.

About Pyxus International, Inc.
Pyxus International Inc. is a global agricultural company with more than 145 years of experience delivering value-added products and services to businesses, customers and consumers. Driven by a united purpose—to transform people's lives, so that together we can grow a better world—Pyxus International, its subsidiaries and affiliates, are trusted providers of responsibly sourced, independently verified, sustainable and traceable agricultural and consumer-driven products and ingredients. For more information, visit www.pyxus.com.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations of future events. Such statements include, but are not limited to, statements about future financial and operating results, plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based on the current beliefs and expectations of management and are subject to significant risks and uncertainties. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results may differ materially from those currently anticipated expected or projected. Some of these risks and uncertainties include:

risks and uncertainties relating to the Chapter 11 cases, including but not limited to: whether the Company's leaf tobacco customers, farmers and other suppliers might lose confidence in Pyxus as a result of the Chapter 11 cases and may seek to establish alternative commercial relationships, whether, as a result of the Chapter 11 cases, foreign lenders that have provided short-term operating credit lines to fund leaf tobacco operations at the local level may lose confidence in Pyxus and cease to provide such funding, and uncertainty and continuing risks associated with the Company's ability to achieve its goals and continue as a going concern;

risk and uncertainties related to the Company's leaf tobacco operations, including changes in the timing of anticipated shipments, changes in anticipated geographic product sourcing, changes in relevant capital markets affecting the terms and availability of short-term seasonal financing, political instability, currency and interest rate fluctuations, shifts in the global supply and demand position for tobacco products, changes in tax laws and regulations or the interpretation of tax laws and regulations, resolution of tax matters, adverse weather conditions, the impact of disasters or other unusual events affecting international commerce, and changes in costs incurred in supplying products and related services;

risks and uncertainties related to the COVID-19 pandemic, including possible delays in shipments of leaf tobacco, including from the closure or restricted activities at ports or other channels, disruptions to the Company's operations or the operations of suppliers and customers resulting from restrictions on the ability of employees and others in the supply chain to travel and work, border closures, determinations by Pyxus or shippers to temporarily suspend operations in affected areas, whether the Company's operations that have been classified as "essential" under various governmental orders restricting business activities will continue to be so classified or, even if so classified, whether site-specific health and safety concerns related to COVID-19 might otherwise require operations at any of our facilities to be halted for some period of time, negative consumer purchasing behavior with respect to the Company's products or the products of its leaf tobacco customers during periods of government mandates restricting activities imposed in response to the COVID-19 pandemic, and the extent to which the impact of the COVID-19 pandemic on the Company's operations and the demand for its products may not coincide with impacts experienced in the United States due to the international scope of its operations, including in emerging markets that have only recently experienced COVID-19 outbreaks; and

risks and uncertainties related to the Company's new business lines, including with respect to the impact of regulation associated with new business lines, including the risk of obtaining anticipated regulatory approvals for cannabis products in Canada and for nicotine e-liquids products in the United States, uncertainties regarding the regulation of the production and distribution of industrial hemp products and continued compliance with applicable regulatory requirements, uncertainties with respect to the development of the industries and markets of the new business lines, consumer acceptance of products offered by the new business lines, uncertainties with respect to the timing and extent of geographic and product-line expansion, the impact of increasing competition in the new business lines, uncertainties regarding the viability of facilities expansions, the possibility of delays in the completion of facilities expansions and uncertainties regarding the potential production yields of new or expanded facilities, as well as the progress of legalization of cannabis for medicinal and adult recreational uses in other jurisdictions.

Additional factors with respect to risks and uncertainties with respect to an investment in the common stock of Pyxus International, Inc. can be found in its Annual Report on Form 10-K for the period ended March 31, 2020 and its other filings with the Securities and Exchange Commission (the "SEC") which are available at the SEC's Internet site (http://www.sec.gov). Pyxus does not undertake to update any forward-looking statements made in this press release to reflect any change in management's expectations or any change in the assumptions or circumstances on which such statements are based, except as required by law.

SOURCE Pyxus International, Inc.