Northwest Hardwoods Successfully Completes Financial Restructuring Process, Positioned for Long-Term Growth
TACOMA, Wash., January 29, 2021
On January 29, 2021, Northwest Hardwoods, Inc. and certain of its affiliates (collectively, “NWH” or the “Company”) announced that it had completed its financial restructuring process and emerged from Chapter 11. Through restructuring, NWH has substantially reduced its long-term debt obligations by nearly $270m and significantly reduced its debt service obligations. Consequently, the Company holds a strong position to re-invest in long-term growth and continue to provide industry-leading quality and service to its customers.
During the restructuring process, the Company’s operations continued without interruption. Employees, suppliers, vendors, contract counterparties and other trade creditors were paid in full and in the ordinary course of business or were otherwise unimpaired.
“This is an important milestone for Northwest Hardwoods and marks the beginning of a new and exciting phase for the company,” said CEO Nathan Jeppson. “The successful completion of this restructuring process has allowed us to significantly reduce our cost structure and positions us to invest meaningfully in our long-term growth. Today’s news helps us advance our mission to unleash the potential of the most environmentally sound hardwood products across the globe.”
NWH’s financial restructuring is the product of extensive and collaborative discussions among NWH and its key prepetition stakeholders. Pursuant to the Company’s “pre-packaged” chapter 11 plan, its ~$379 million of secured notes were converted into $110 million of secured exit takeback term loans and 99% of the equity in reorganized NWH (subject to dilution). The remainder of the reorganized equity is reserved for the Company’s existing equity holders in exchange for their support throughout the process. In addition, the Company has entered into a new ABL credit agreement with Bank of America and Wells Fargo, ensuring that the Company will continue to have ready access to a robust working capital facility.
The ad hoc group of holders of the company’s prepetition secured notes (the “Ad Hoc Group”), encompassing over 90% of the company’s secured notes, has likewise expressed its satisfaction with the completion of the restructuring process. Expressing its support, the Ad Hoc Group stated “Today’s news is welcome for all of Northwest Hardwoods stakeholders and investors. We believe strongly in the long-term growth of Northwest Hardwoods, its incredible employees and the strength of its management team. We look forward to a successful future for Northwest Hardwoods”.
Gibson, Dunn & Crutcher LLP and Young Conaway Stargatt & Taylor, LLP served as legal counsel to NWH and Huron Consulting Group served as financial advisor. The ad hoc group was represented by Willkie Farr & Gallagher LLP and Pachulski Stang Ziehl & Jones LLP, as legal counsel and Guggenheim Securities, LLC as financial advisor. This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities.
NWH is the largest United States manufacturer of North American hardwood lumber based on sawmill capacity, with a current estimated annual hardwood lumber capacity of approximately 320 million board feet. Its North America operations include 20 facilities that produce over 20 species of domestic hardwoods. The Company serves more than 2,000 active customers across over 60 countries.