INDEPENDENCE, Ohio,
June 29, 2020 /PRNewswire/
-- Covia (NYSE:CVIA) today announced that it has taken a major
step toward creating a sustainable capital structure by reducing
debt and eliminating excess fixed costs by more than $1 billion. The Company has entered into a
restructuring support agreement (the "RSA") with holders of a
majority of its secured debt for a comprehensive financial
restructuring of its debt.
To implement the terms of the RSA, the Company and certain of
its U.S. subsidiaries have voluntarily filed petitions for
reorganization under Chapter 11 of the U.S. Bankruptcy Code in the
U.S. Bankruptcy Court for the Southern District of Texas, Houston Division. In addition to
reducing its debt, the Company expects to significantly reduce
excess fixed costs, improve operating cash flow and position the
Company to better execute its go-forward business strategy through
the Chapter 11 reorganization process. The Company's foreign
subsidiaries, including those in Canada, Mexico and Denmark, were not included in the filings, and
its international operations are continuing in the ordinary
course.
Covia's U.S. operations will also continue in the ordinary
course of business serving customers. The Company's current cash
reserves of approximately $250
million are expected to provide substantial liquidity to
fund operations, support its long-term investment program, and
manage the reorganization process.
"The actions announced today are expected to significantly
strengthen our balance sheet and improve our operating cash flow,
making Covia an even stronger partner to our customers in both the
near- and long-term," said Richard
Navarre, Chairman, President and Chief Executive Officer.
"Following a careful and comprehensive review, the Board of
Directors and management determined these actions are the best
option to ensure the long-term success for Covia. We are pleased to
have our lenders' support for our restructuring plan, which
demonstrates their confidence in our ongoing operations. Their
support of our plan should also allow us to complete this
restructuring on an expedited timeframe."
Mr. Navarre noted that the unprecedented backdrop from the
COVID-19 pandemic and recent energy price shocks have significantly
impacted the Company's end markets and customers.
"We have made important and substantial progress over the last
year executing our strategy and aligning our business with changing
market conditions, however, the negative impact of the pandemic and
energy downturn has required this action," said Mr. Navarre. "The
reorganization process we began today serves as the means to a new
beginning, and we expect the actions we have taken recently will
enhance the competitive position of our high-quality assets for the
future."
Mr. Navarre commented that the Covia team remains steadfastly
focused on operating safely and serving the Company's customers
with quality products.
"We thank our customers for their support and also appreciate
the continued cooperation of our business partners who play a key
role in bringing our materials to market," he said. "We also thank
our employees for their hard work and commitment to working safely
and productively in the face of recent challenges. This gives me
great confidence in our ability to continue to meet our customers'
needs and successfully exit the process even stronger."
Covia has filed a number of customary motions seeking court
authorization to support its operations during the court-supervised
process, including the continued payment of employee wages and
benefits without interruption. The Company intends to pay vendors
and suppliers in full under normal terms for goods and services
provided after the filing date. Covia expects to receive court
approval for these requests and intends to move through the
restructuring proceedings as quickly as possible.
Additional Information
Additional information can be
found at ir.CoviaCorp.com. Court documents and other materials
related to the court-supervised process are available on a website
hosted by the Company's claims agent, Prime Clerk,
at https://cases.primeclerk.com/Covia. The Company has
established a call center for questions: 877-606-3610 if calling
from within the U.S. or Canada, or
929-955-3452 if calling from outside the U.S. or Canada.
Covia has retained Kirkland & Ellis LLP as its legal
advisor, PJT Partners, LP as its investment banker and
AlixPartners, LLP as its financial advisor.
About Covia
Covia is a leading provider of diversified
mineral solutions to the oil and gas, glass, ceramics, coatings,
metals, foundry, polymers, construction, water filtration, sports
and recreation markets. The Company serves its Industrial customers
through a broad array of high-quality products, including
high-purity silica sand, nepheline syenite, feldspar, clay, kaolin,
resin systems and coated materials, delivered through its
comprehensive distribution network. Covia offers its Energy
customers an unparalleled selection of proppant solutions,
additives, and coated products to enhance well productivity and to
address both surface and down-hole challenges in all well
environments. Covia has built long-standing relationships with a
broad customer base consisting of blue-chip customers. Underpinning
these strengths is an unwavering commitment to safety and to
sustainable development, further enhancing the value that Covia
delivers to all of its stakeholders. For more information, visit
CoviaCorp.com.
Caution Concerning Forward-Looking Statements
This
release contains statements which, to the extent they are not
statements of historical or present fact, constitute
forward-looking statements within the meaning of Section 21E of the
Securities Exchange Act of 1934, as amended, and the Private
Securities Litigation Reform Act of 1995 ("PSLRA"), and such
statements are intended to qualify for the protection of the safe
harbor provided by the PSLRA. The words "anticipate," "estimate,"
"expect," "objective," "goal," "project," "intend," "plan,"
"believe," "will," "should," "may," "target," "forecast,"
"guidance," "outlook" and similar expressions generally identify
forward-looking statements. Similarly, descriptions of the
Company's objectives, strategies, plans, goals or targets are also
forward-looking statements. Forward-looking statements relate to
the expectations of the Company's management as to future
occurrences and trends, including statements expressing optimism or
pessimism about future operating results or events and projected
sales, earnings, capital expenditures and business strategy.
Forward-looking statements are based upon a number of assumptions
concerning future conditions that may ultimately prove to be
inaccurate. Forward-looking statements are based upon management's
then-current views and assumptions regarding future events and
operating performance. Although the Company's management believes
the expectations expressed in forward-looking statements are based
on reasonable assumptions within the bounds of its knowledge,
forward-looking statements involve risks, uncertainties and other
factors which may materially affect the Company's business,
financial condition, and results of operations or liquidity.
Forward-looking statements are not guarantees of future
performance and actual results may differ materially from those
discussed in the forward-looking statements as a result of various
factors, including, but not limited to: the impact of the COVID-19
pandemic on our business and the businesses of our customers; the
bankruptcy process and the effects of the Chapter 11 cases,
including increased professional costs, on the Company's liquidity,
results of operations and business; the Company's ability to obtain
approval from the Bankruptcy Court with respect to motions or other
requests throughout the Chapter 11 case; the Company's ability to
comply with the continued listing criteria of the New York Stock
Exchange ("NYSE") and risks arising from the suspension of trading
of the Company's common stock on, or delisting from, the NYSE; the
effects of Chapter 11 on the interests of various constituents and
the ability to negotiate, develop, confirm and consummate a plan of
reorganization; changes in prevailing economic conditions,
including fluctuations in supply of, demand for, and pricing of,
the Company's products; potential business uncertainties relating
to the merger, including potential disruptions to the Company's
business and operational relationships, the Company's ability to
achieve anticipated synergies, and the anticipated costs, timing
and complexity of the Company's integration efforts; loss of, or
reduction in, business from the Company's largest customers or
their failure to pay the Company; possible adverse effects of being
leveraged, including interest rate, event of default or refinancing
risks, as well as potentially limiting the Company's ability to
invest in certain market opportunities; the Company's ability to
successfully develop and market new products; the Company's rights
and ability to mine its property and its renewal or receipt of the
required permits and approvals from government authorities and
other third parties; the Company's ability to implement and realize
efficiencies from capacity expansion plans, and cost reduction
initiatives within its time and budgetary parameters; increasing
costs or a lack of dependability or availability of transportation
services or infrastructure and geographic shifts in demand;
changing legislative and regulatory initiatives relating to the
Company's business, including environmental, mining, health and
safety, licensing, reclamation and other regulation relating to
hydraulic fracturing (and changes in their enforcement and
interpretation); silica-related health issues and corresponding
litigation; seasonal and severe weather conditions; other operating
risks beyond the Company's control; the risks discussed in the Risk
Factors section of the Company's Annual Report on Form 10-K as
filed with the Securities and Exchange Commission ("SEC") on
March 16, 2020; and the other factors
discussed from time to time in the Company's Annual Reports on Form
10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K
and other filings with the SEC. This release should be read in
conjunction with such filings, and you should consider all such
risks, uncertainties and other factors carefully in evaluating
forward-looking statements.
You are cautioned not to place undue reliance on forward-looking
statements, which speak only as of the date thereof. The Company
undertakes no obligation to publicly update forward-looking
statements, whether as a result of new information, future events
or otherwise. You are advised, however, to consult any further
disclosures the Company makes on related subjects in its public
announcements and SEC filings.
Investor contact:
Matthew
Schlarb
440-214-3284
Matthew.Schlarb@coviacorp.com
Media contact:
Nick
Lamplough / Aaron Palash /
Amy Feng
Joele Frank, Wilkinson Brimmer
Katcher
(212) 355-4449
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SOURCE Covia Holdings Corporation