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Northwest Hardwoods Announces Agreement on Transaction to Strengthen Balance Sheet

General News

Northwest Hardwoods, Inc. and certain of its affiliates (“NWH” or the “Company”) announced that the Company has entered into a restructuring support agreement (the “RSA”) with holders of more than 95% in principal amount of the Company’s secured notes and certain of its existing equity holders to execute a transaction that will deliver its balance sheet by ~$270 million and position NWH for future growth and success.

The RSA is the product of extensive, collaborative, good faith negotiations among NWH and its key stakeholders. The financial restructuring is specifically designed to ensure that NWH’s executive team can remain focused on go-forward operations, which will continue in the ordinary course without interruption.

Specifically, this agreement accomplishes several key objectives: 1) reduce the company’s debt by $270 million 2) significantly reduce debt service obligations, thereby increasing cash flow available for re-investment in the business and 3) most importantly, accomplishes this without impacting our employees, vendors or customers.

Through the transaction, the secured noteholders will convert their ~$379 million of secured notes into $110 million of new exit term loans and 99% of the equity in reorganized NWH (subject to dilution by a management incentive plan). The remainder of the reorganized equity will be reserved for the Company’s existing equity holders. In addition, NWH has received a commitment from Bank of America and Wells Fargo to refinance the existing ABL facility as part of the financial restructuring, ensuring that the Company will continue to have ready access to a working capital facility going forward.

The Company will effectuate the transaction either through an out-of-court debt-for-equity exchange or through a prepackaged chapter 11 plan of reorganization. The terms of the restructuring under each approach are substantially the same, and both approaches will ensure that the Company’s operations continue without interruption, with employees, suppliers, vendors, contract counterparties and other trade creditors continuing to be paid in full in the ordinary course. In a chapter 11 scenario, the Company would fund the process with its existing cash collateral.

The Company expects to make a decision imminently on the specific path it will take to consummate the restructuring transaction.

NWH is represented by Gibson, Dunn & Crutcher LLP and Young Conaway Stargatt & Taylor, LLP as legal co-counsels and Huron Consulting Group as financial advisor. The secured noteholders are represented by Willkie Farr & Gallagher 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.

About Northwest Hardwoods

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.


Jacob Schriner – Marketing Specialist – (253) 568-6800

Source: Northwest Hardwoods, Inc.