UTEX Industries Reaches Agreement on Prepackaged Restructuring To Reduce Debt; Business Will Operate In Ordinary Course with No Disruption to Employees, Vendors, or Customers

HOUSTON, Oct. 6, 2020 /PRNewswire/ -- UTEX Industries, Inc. ("UTEX" or the "Company") today announced that it has entered into a restructuring support agreement (the "Agreement") with the vast majority of its lenders on the terms of a comprehensive "prepackaged" restructuring.  The balance sheet transaction will reduce UTEX's funded debt by approximately $700 million and will provide UTEX with up to $42.5 million in new financing.  UTEX expects to complete this process and consummate its prepackaged restructuring in a matter of weeks.

To implement this balance sheet restructuring, the Company will commence a "prepackaged" plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code.  UTEX's prepackaged plan is supported by over 81.6% and 90.4% of UTEX first and second lien lenders, respectively.  UTEX's lenders have also agreed to provide UTEX with debtor-in-possession financing and the consensual use of cash collateral to enable UTEX to operate its business in the ordinary course.  UTEX's prepackaged plan provides that all general unsecured creditors, including UTEX's vendors and business partners, will remain unimpaired and will be paid in full in the ordinary course of business.   

Mike Balas, Chief Executive Officer said: "After an extensive analysis of strategic and financial options for the Company, and after months of negotiations, we are very pleased to have reached an agreement for a consensual restructuring with our secured lenders and other stakeholders.  We believe that the restructuring contemplated by the Agreement will provide us with the capital structure and liquidity to compete and grow in today's business environment.  I am grateful to our dedicated employees who have continued to work hard in this challenging business environment, and this transaction will position us and our partners for success in the years to come."

The Company will continue to operate its business in the normal course without disruption to its vendors, customers, employees, or other partners, and, subject to customary approvals, will have access to substantial liquidity to meet its obligations in the ordinary course during the restructuring.  This includes funding employee wages and benefits, paying vendors and suppliers for all goods and services, and providing customers the same high-quality products and outstanding service they have come to expect from UTEX.

In connection with the financial restructuring, Houlihan Lokey is serving as financial advisor and investment banker, AlixPartners is serving as restructuring advisor, and Weil, Gotshal & Manges LLP is serving as legal advisor to UTEX.

About UTEX

UTEX is a market-leading manufacturing business headquartered in Houston, Texas.  UTEX operates manufacturing, distribution, and technical sales facilities in the United States and abroad and has approximately 500 employees.  UTEX's innovative, custom-engineered, Best-in-Class solutions support a diverse customer base in the oil & gas, industrial, mining, and water end markets. 

Nothing in this press release shall constitute a solicitation of the holders of any of UTEX's indebtedness or equity interests with respect to the matters contemplated by the Agreement or an offer to buy or sell, or a solicitation of an offer to buy or sell, any securities of UTEX.  Any such securities that may be offered under the transactions contemplated by the Agreement have not been and will not be registered under the Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act.

Certain statements in this press release constitute forward looking statements. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements include, without limitation, any statement that may project, indicate or imply future results, events, performance or achievements, and may contain or be identified by the words "believe," "expect," "expected to be," "anticipate," "contemplates", "plan," "intend," "foresee," "forecast," "continue," "can," "will," "will continue," "may," "should," "would," "could" or other similar expressions that are intended to identify forward-looking statements and include statements about our ability to successfully complete the restructuring contemplated by the Agreement and emerge from chapter 11.  Readers are cautioned that any forward-looking statements herein, are subject to a number of assumptions, risks, and uncertainties, many of which are beyond our control.  Important assumptions and other important factors that could cause actual results to differ materially and include, a decrease in drilling activity, as well as the volatility in commodity prices for crude oil and natural gas, competition, government regulation or other actions, the ability of management to execute its plans to meet its goals and other risks inherent in our businesses.  Readers are cautioned that the forward-looking statements speak as of the date hereof, are based on our current beliefs, intentions and expectations, and are not guarantees of future performance. Actual results or developments may differ materially from the expectations expressed or implied in the forward-looking statements, and UTEX undertakes no obligation to update any such statements.

SOURCE UTEX Industries, Inc.