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Pyxus files for bankruptcy

16 Jun 2020. Tobacco supplier Pyxus International is deploying a “prepackaged” option to reduce more than USD 400 million in debt and secures commitment of USD 206.7 million in Debtor-In-Possession financing, the company said in a press release.

Pyxus announced that it and its subsidiaries, Alliance One International, LLC, Alliance One North America, LLC, Alliance One Specialty Products, LLC and GSP Properties, LLC, filed voluntary petitions for relief under Chapter 11 of the US Bankruptcy Code in the US Bankruptcy Court for the District of Delaware as part of a "prepackaged" Chapter 11 Case (the "Chapter 11 Cases").

In connection with the filing, the company entered into a Restructuring Support Agreement ("RSA") with noteholders holding more than 92 per cent in principal amount of the company's first lien notes and more than 67 per cent in principal amount of its second lien notes.

Under the terms of the RSA, Pyxus' second lien noteholders will convert approximately USD 635 million of the company's debt into equity or cash, and its first lien noteholders will, among other things, extend the maturity date of their existing notes by four years, the press release said.

In addition, Pyxus has secured commitments for a USD 206.7 million Debtor-in-Possession financing facility ("DIP Facility") from certain existing noteholders. Proceeds from the DIP Facility will be used to refinance the Company's existing asset-based revolver, for working capital and general corporate purposes, and to pay expenses incurred in connection with the Chapter 11 Cases.

Operations will continue without interruption and with no expected impact to customers, vendors or employees, Pyxus said.

"This agreement with our noteholders represents a significant milestone in the ongoing process to transform our business as we continue to focus on driving long-term, sustainable growth and greater efficiency," said Pieter Sikkel, Pyxus' President and CEO.

"We will continue to provide our customers with the quality products and services they are accustomed to without interruption and work with our business partners throughout the Court-supervised process. We also expect there will be no impact to vendors. As we look to quickly re-emerge from this process, we expect to be a stronger company, better able to execute on our long-term strategy and positioned for long-term growth and success."