- Company Files Consensual Plan of Arrangement and Reorganization with
Support of Senior Lenders and Plan Sponsor;
- No Impact on Operations, Employees or Vendors
OTTAWA, Dec. 9 /CNW Telbec/ - Allen-Vanguard Corporation ("Allen-Vanguard" or the "Company") of Ottawa, Canada today announced that it has commenced a Court-supervised process under the Companies' Creditors Arrangement Act (the "CCAA") for creditor and Court approval of its recapitalization transaction (the "transaction"). The transaction was entered into on September 12, 2009 under an agreement among Allen-Vanguard, the Company's senior secured lenders (the "senior lenders") and Contego AV Investments LLC (the "plan sponsor"), an affiliate of Versa Capital Management, Inc., for a comprehensive recapitalization of the Company (the "Transaction Agreement").
The Company filed the appropriate documents with the Ontario Superior Court of Justice in Toronto today, including a pre-negotiated Plan of Arrangement and Reorganization (the "Plan") that will give effect to the transaction under the provisions of the CCAA. The filing was made with the full support of the senior lenders and the plan sponsor. The filing does not affect any of the Company's domestic or foreign subsidiaries.
The initial CCAA application was heard by the Court today, and a meeting for voting on the Plan by the senior lenders was called and convened under the provisions of the CCAA. The Plan was unanimously approved by the senior lenders at the meeting. The next step in the CCAA process - a hearing to consider Court approval of the Plan - has been scheduled for December 16, 2009 (the "Approval Hearing"). The Initial Order granted by the Court today (the "Initial Order") appointed Deloitte & Touche Inc. to act as Monitor of the Company during the CCAA proceedings (the "Monitor").
All Court materials concerning the CCAA process, the Approval Hearing and the Plan are now available on the Monitor's website at www.deloitte.com/ca/allen-vanguard (the "Website"). Included in these Court materials on the Website is a "Notice of Sanction Hearing" that sets out the time of the Approval Hearing, the specific process that must be followed, and the deadlines that must be met, by anyone wishing to appear at the Approval Hearing.
Under the terms of the Transaction Agreement and the Initial Order granted by the Court today, Allen-Vanguard will have continued access to the funding necessary to maintain its day-to-day operations during the Court-approval process. The Company's obligations to its customers, employees, retirees and vendors, regardless of location, are unaffected by the terms of the Initial Order and the Plan. The Initial Order granted by the Court calls for the Company to continue all of its regular business operations and payments for goods and services both before and after today's filing. The Company's cash management systems and interim financing arrangements all remain in effect. All existing contracts continue.
The filing of the Plan today is the culmination of a lengthy process by the Company and its senior lenders to achieve a refinancing solution for the Company, its business and principal stakeholders.
"Our Plan has now been formally approved by our creditors. Today's CCAA filing will bring the Plan to its final stage of approval by the Court," stated David E. Luxton, the President and Chief Executive Officer of Allen-Vanguard. "We are pleased to have commenced the Court-approval process today and taken the next step towards completing our recapitalization objective. Under the Plan as presented today, Allen-Vanguard will emerge as a recapitalized company with the ability to continue in a manner that best preserves value for our economic stakeholders."
Mr. Luxton continued, "This transaction will place Allen-Vanguard on a much stronger financial footing that will allow us to focus on building upon our competitive position and positive reputation for leading technologies. The transaction preserves the Allen-Vanguard business and ensures its continuance as a successful competitor in the marketplace and the countries where Allen-Vanguard provides its vital products and services. We are looking forward to completing this final phase of our restructuring and to getting back to business."
Under the Plan, the plan sponsor will provide approximately US$70 million of additional capital to the Company. That capital will be used to fund a comprehensive restructuring of the indebtedness owed to the senior lenders (the "senior debt"). Among other things: (i) the senior lenders will forego approximately US$14 million of senior debt and fees owed to them; (ii) the amount of senior debt owed to the senior lenders will be reduced by another US$54.3 million of senior debt (to be assumed by the plan sponsor on a second lien basis); (iii) the plan sponsor will fund a further US$5 million reduction of the total outstanding amount of senior debt; and (iv) the remainder of the senior debt will then be comprehensively restructured under the terms of a new credit facility negotiated with the senior lenders and the plan sponsor that contains terms materially more favourable for the Company (including reduced interest and loan amortization and less restrictive financial covenants).
The senior lenders will also provide the Company with a new US$30 million revolver and a new US$10 million letter of credit facility to finance the Company going-forward, and have also agreed to provide the Company with additional interim financing of up to US$16 million in connection with and pending the closing of the transaction. Given the financial condition of the Company, no consideration is available under the Plan for holders of the Company's securities and all existing securities of the Company (including all warrants held by the senior lenders) will be cancelled or transferred to the plan sponsor, and the plan sponsor will become the new owner of the Company. The Company intends to implement the Plan and the transaction immediately after approval by the Court at the Approval Hearing.
Parties wishing to contact the Monitor for additional information concerning the CCAA process may contact Pierre Laporte, National Business Unit Leader, Financial Advisory Services of Deloitte & Touche Inc. at firstname.lastname@example.org or at 416-874-3604 or David Boddy at email@example.com or Tel: 613-751-5227, Fax: 613-563-2244.
Allen-Vanguard Corporation supports the mission of military and homeland security forces around the world with leading proprietary solutions for protection and counter-measures against hazardous devices of all kinds, whether chemical, biological, radiological or explosive (CBRNE), including improvised explosive devices (IEDs) and remotely controlled IEDs ("RCIED"s). Allen-Vanguard equipment is in service in more than 120 countries. Products include Electronic Counter-Measures (ECM) equipment for jamming remote detonation of terrorist devices, specialty security equipment for Explosive Ordnance Disposal (EOD), remote intervention robots for hazardous applications, and personal protective wear for use in dealing with explosive and bio-chemical agents. Allen-Vanguard is the developer and/or sole, worldwide licensee of proprietary technologies such as the Med-Eng bomb suit, the Defender(TM) and Vanguard(TM) Mk2 bomb disposal robots, and the Universal Containment System and CASCAD Foam system for blast mitigation and decontamination of bio-chemical warfare agents. Professional services encompass counter-IED intelligence, training and advisory services, including the Triton(TM) Report on terrorist incidents around the world. The Company operates globally through its wholly-owned subsidiaries under the names "Allen-Vanguard", "Med-Eng" and "Hazard Management Solutions."
Head office operations are located in Ottawa, Ontario, Canada, with manufacturing operations in Pembroke, Ontario; Ogdensburg, New York; and Tewkesbury, U.K.. The Company has professional services operations in Shrivenham, UK, Canada and in the U.S. in Arlington, Virginia, plus sales offices in Canada, the U.S., the U.K. and Asia. The Company employs over 500 people, of which approximately 300 are in Canada. Additional information is available online at www.allenvanguard.com.
Forward looking statements
This press release may contain forward-looking statements, which reflect Allen-Vanguard's current expectations regarding future events, its strategy, expected performance and condition. Forward-looking statements include statements that are predictive in nature, that depend upon or refer to future events or conditions, or that include words such as "expects," "anticipates," "plans," "believes," "estimates" or negative versions thereof and similar expressions. In addition, any statement that may be made concerning future performance, strategies or prospects, and possible future investments, acquisitions or dispositions, is also a forward-looking statement. Forward-looking statements are based on current expectations and projections about future events and are inherently subject to, among other things, risks, uncertainties and assumptions about the Company and economic factors. Forward-looking statements are not promises or guarantees of future performance, and actual events and results could differ materially from those expressed or implied in any forward-looking statements made about the Company. Any number of important factors could contribute to these digressions, including, but not limited to, general economic, political and market factors in North America and internationally, interest and foreign exchange rates, global equity and capital markets, business competition, technological change, changes in government regulations, unexpected judicial or regulatory proceedings, and catastrophic events. We stress that the above-mentioned list of important factors is not exhaustive. We encourage you to consider these and other factors carefully before making any investment decision and we urge you to avoid placing undue reliance on forward-looking statements. Further, you should be aware that the Company disclaims any obligation to publicly update or revise any such forward-looking statements whether as a result of new information, future events or otherwise, prior to the release of the next Management Discussion and Analysis to be released by the Company or except as required by law.
SOURCE ALLEN-VANGUARD CORPORATION
For further information: For further information: on Allen-Vanguard: Toll Free: 1-800-644-9078, Tel: (613) 739-9646