Receives Commitment from Existing Secured
Lenders for up to $19.5
Million in Debtor-in-Possession
Financing
ATLANTA, July 24,
2023 /PRNewswire/ -- Williams Industrial Services
Group Inc. (NYSE American: WLMS) (the "Company"), a leading
provider of infrastructure related services to blue-chip customers
in energy and industrial end markets, including a broad range of
construction maintenance, modification, and support
services, announced today that it and certain of its
subsidiaries have filed voluntary Chapter 11 proceedings in the
U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court") and agreed
to sell substantially all of the Company and its subsidiaries
assets to EnergySolutions for $60
million.
The Transaction
The Company and
EnergySolutions, a global provider of energy and industrial
services headquartered in Salt Lake City,
UT, have entered into a purchase agreement pursuant to which
EnergySolutions will acquire substantially all the assets
and assume certain ordinary course operating liabilities of the
Company and its subsidiaries for $60
million. These assets represent the Company's nuclear,
fossil, energy delivery, and paper mill operations, which have
continued to perform profitably and have strong prospects for
future growth. EnergySolutions is not acquiring the
Company's operations connected to its water contracts in
Florida and Texas.
Tracy Pagliara, President and CEO
of the Company, stated: "Having carefully reviewed all available
options, our comprehensive strategic alternatives process has
concluded. I am confident that EnergySolutions will be
a great owner for the Williams business it is acquiring as we stand
on the precipice of a global nuclear renaissance and significant
growth in energy and industrial infrastructure services.
EnergySolutions is well capitalized and positioned to ensure
that Williams' rich history of being a customer-centric services
provider will continue. Obviously, the Chapter 11 filing is
not the outcome we would have wanted for our stockholders or the
stakeholders of our water business, but this difficult decision was
necessary to deliver the primary and profitable parts of the
Williams business to EnergySolutions as a going
concern."
Ken Robuck, President and CEO of
EnergySolutions, added, "We are very excited to
announce this transaction. This is a strategic move that will
allow EnergySolutions to expand our nuclear services
offerings to existing nuclear operating plants and, ultimately, to
support the nuclear industry's drive to create more clean,
carbon-free energy through nuclear plant life extension work and
the construction of new technologies. We understand that
Williams has been through a difficult time, but we are confident
that this acquisition will be a positive for the Williams'
businesses we are acquiring. These businesses will gain
access to our resources and expertise, and we will gain access to
their talented team and proven track record in successfully
executing nuclear plant maintenance, modifications and new
construction projects. Combined with our nuclear waste,
decommissioning and onsite integrated services, this acquisition
will nicely complement our existing business lines and provide an
excellent platform for future growth and expansion into other
sectors of the nuclear industry."
DIP Financing
In order to provide necessary funding
during the Chapter 11 proceeding, the Company has received
commitments for two debtor-in-possession ("DIP") financing credit
agreements with its prepetition lenders. Upon approval by the
Bankruptcy Court, the DIP financing agreements are expected to
provide the Company with the necessary liquidity to permit the
businesses that will be disposed of to operate in the normal course
and meet their obligations to their employees, vendors and
customers throughout the Chapter 11 proceeding while executing on
the sale process of the businesses for which EnergySolutions
is the "stalking horse" bidder.
One of the Company's DIP facilities will be a revolving line of
credit ("RLOC") which will replace the Company's prepetition RLOC,
allowing for continued credit advances based on the Company's
collateral contributions up to a maximum availability of
$12 million. The second facility is a
delayed draw term loan ("DDTL") with the Company's existing term
lenders which will provide up to $19.5
million of incremental liquidity following the petition
filing.
Chapter 11 Process
The transaction with
EnergySolutions is part of a sale process under Section 363
of the Bankruptcy Code in which EnergySolutions is the
"stalking horse" bidder, meaning that the purchase agreement
between the Company and EnergySolutions contains the terms
against which competing offers will be solicited and evaluated
during a Chapter 11 auction process. The Company is seeking
Bankruptcy Court approval of bidding procedures allowing for the
submission of higher or otherwise better offers, and is seeking to
consummate a sale by September 30,
2023, subject to Bankruptcy Court approval. The
Company will manage the bidding process and evaluate any bids
received, in consultation with its advisors and otherwise in
accordance with the bidding procedures and oversight by the
Bankruptcy Court.
Under the purchase agreement, EnergySolutions will
not acquire the Company's operations connected to its water
contracts in Florida and
Texas. The Company is not
currently projecting any return for its stockholders or for certain
creditors of the retained water business.
Background to the Chapter 11 Filing and Sale
Transaction
The factors that precipitated the Company's
Chapter 11 filing and sale process included: the loss of
customer contracts in early 2022 that comprised 19% and 20% of the
Company's annual revenue and gross profit, respectively, in 2021
and the accompanying loss of $361
million in backlog for 2022 and later years; more than
$15 million of operating losses
associated with the Company's water operations from 2021 through
2023 year to date; approximately $8
million of start-up costs and operating losses related to
the Company's entry into the transmission and distribution market
from early 2021 through the first quarter of 2023; and the
inability of the Company to convert enough pipeline into revenue
and to cut enough costs to overcome these losses and corresponding
liquidity challenges.
As previously announced, the Company undertook actions to
improve the performance of its business, including an aggressive
move to trim operating expenses, the implementation of a plan to
shorten collection times on accounts receivable, and an attempt to
expand into the transmission and distribution market. However,
those moves were insufficient to position the business for
profitability.
Williams Industrial Services Group is advised by Thompson Hine
LLP and Chipman Brown Cicero &
Cole, LLP as its legal advisors, G2 Capital Advisors, LLC as its
financial advisor, and Greenhill & Co., LLC as its investment
banker.
EnergySolutions is advised by Ropes & Gray LLP as its
legal advisors.
For additional information about the cases please visit
https://dm.epiq11.com/WilliamsIndustrialServicesGroup.
About Williams
Williams Industrial Services Group has
been safely helping plant owners and operators enhance asset value
for more than 50 years. The Company is a leading provider of
infrastructure related services to blue-chip customers in energy
and industrial end markets, including a broad range of construction
maintenance, modification, and support services. Williams' mission
is to be the preferred provider of construction, maintenance, and
specialty services through commitment to superior safety
performance, focus on innovation, and dedication to delivering
unsurpassed value to its customers.
Additional information about Williams can be found on its
website: www.wisgrp.com.
About EnergySolutions
EnergySolutions
offers customers a full range of integrated services and solutions,
including nuclear operations, characterization, decommissioning,
decontamination, site closure, transportation, nuclear materials
management, processing, recycling, and disposition of nuclear
waste, and research and engineering services across the nuclear
fuel cycle. For additional information about
EnergySolutions visit www.energysolutions.com.
Forward-looking Statement Disclaimer
This press
release contains "forward-looking statements" within the meaning of
the term set forth in the Private Securities Litigation Reform Act
of 1995. Forward-looking statements generally use forward-looking
words, such as "may," "will," "could," "should," "would,"
"project," "believe," "anticipate," "expect," "estimate,"
"continue," "potential," "plan," "forecast" and other words that
convey the uncertainty of future events or outcomes. These
forward-looking statements are not guarantees of the Company's
future performance and involve risks, uncertainties, estimates and
assumptions that are difficult to predict and may be outside of the
Company's control. Therefore, the Company's actual outcomes and
results may differ materially from those expressed in or
contemplated by the forward-looking statements. Forward-looking
statements include, but are not limited to, information concerning
the following: expectations regarding risks attendant to the
Chapter 11 bankruptcy process, including the Company's ability to
obtain court approval from the Bankruptcy Court with respect to
motions or other requests made to the Bankruptcy Court throughout
the course of the Chapter 11 process, including with respect to the
asset sale and DIP credit agreements; the Company's plans to sell
certain assets pursuant to Chapter 11 of the U.S. Bankruptcy Code,
the outcome and timing of such sale, and the Company's ability to
satisfy closing and other conditions to such sale; the effects of
Chapter 11, including increased legal and other professional costs
necessary to execute the Company's wind down, on the Company's
liquidity and results of operations (including the availability of
operating capital during the pendency of Chapter 11); the length of
time that the Company will operate under Chapter 11 protection and
the continued availability of operating capital during the pendency
of Chapter 11; the Company's ability to continue funding operations
through the Chapter 11 bankruptcy process, and the possibility that
it may be unable to obtain any additional funding as needed; the
Company's ability to meet its financial obligations during the
Chapter 11 process and to maintain contracts that are critical to
its operations; the Company's ability to comply with the
restrictions imposed by the terms and conditions of the DIP credit
agreements and other financing arrangements; objections to the
Company's wind down process, the DIP credit agreements, or other
pleadings filed that could protract Chapter 11; the effects of
Chapter 11 on the interests of various constituents and financial
stakeholders; the effect of the Chapter 11 filings and any
potential asset sale on the Company's relationships with vendors,
regulatory authorities, employees and other third parties; possible
proceedings that may be brought by third parties in connection with
the Chapter 11 process or the potential asset sale and risks
associated with third-party motions in Chapter 11; the timing or
amount of any distributions, if any, to the Company's stakeholders;
expectations regarding future performance of assets expected
to be sold in the bankruptcy process; employee attrition and the
Company's ability to retain senior management and other key
personnel due to the distractions and uncertainties; the impact and
timing of any cost-savings measures and related local law
requirements in various jurisdictions; the impact of litigation and
regulatory proceedings; expectations regarding financial
performance, strategic and operational plans, and other related
matters; and other factors discussed in the Company's filings with
the U.S. Securities and Exchange Commission, including the "Risk
Factors" section of the Annual Report on Form 10-K for its 2022
fiscal year. Any forward-looking statement speaks only as of the
date of this press release. Except as may be required by applicable
law, the Company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, and you are cautioned not
to rely upon them unduly.
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SOURCE Williams Industrial Services Group Inc.