Merging With PRG, VER Will Reorganize Under Chapter 11 Bankruptcy

Merging With PRG, VER Will Reorganize Under Chapter 11 Bankruptcy The new entity will combine two of the biggest names in live-production services and equipment rental By Jason Dachman, Chief Editor

Thursday, April 5, 2018 - 1:05 pm

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VER has announced plans to merge with Production Resource Group (PRG) and has filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code in order to facilitate the prenegotiated deal. According to a letter distributed by VER CEO Digby Davies, the company has struggled recently because of an inability to service its current debt load. VER will continue operating as usual during the Chapter 11 process, and all existing productions or new projects signed on during the process will not be interrupted, according to the company's announcement.

As part of the comprehensive transaction supported by its second lien lenders, including funds managed by GSO Capital Partners, VER has entered into an agreement to merge with an entity controlled by PRG. VER's voluntary Chapter 11 petitions were made in the U.S. Bankruptcy Court for the District of Delaware. The filings affect only the company's North American operations. According to Davies, VER expects that the restructuring process will take four to six months, and the company will emerge from Chapter 11 with a new capital structure, sufficient cash to fund operations, and the ability to access capital to fund new growth initiatives.

We believe that undertaking the court-supervised restructuring process is the best course of action for VER, Davies said in the letter. Despite a record number of new clients and customer-satisfaction ratings that are highest in the industry, VER has struggled due to an inability to service its current debt load. In entering this reorganization, we have reached an agreement with our existing stakeholders to significantly reduce outstanding debt and have raised financing to provide up to $64.7 million in new liquidity to allow us to operate successfully as we undergo this exciting transition.

Until the restructuring process is complete, VER and PRG will continue to operate as two separate companies. VER clients who have on-going productions as well as new clients who sign on with the company during the process can be confident that their project will not be interrupted, according to the announcement. All employees will receive their usual wages and benefits, and VER expects to work constructively with its suppliers moving forward. Additionally, VER has already reached agreements with certain key stakeholders on the framework of its restructuring plan to expedite the Chapter 11 process.

Entering into this agreement and undertaking the court-supervised restructuring process will greatly reduce VER's outstanding debt and position the company for the merger with PRG, said Davies. The actions announced today will provide a stronger capital structure and sufficient cash to fund operations.

The new entity will combine two of the biggest names in live-production services and equipment rental in VER and PRG.

During the process, we will continue to provide our clients with the largest inventory of equipment and unmatched reliability and expertise, said Davies. Clients will work with their trusted VER representative, and their projects will not be interrupted.

In conjunction with the proposed transaction, VER has received commitments from existing lenders, including funds managed by GSO Capital Partners, for up to $364.7 million in debtor-in-possession (DIP) financing to support its continued operations during the Chapter 11 process. VER has filed a number of customary first-day motions with the Bankruptcy Court seeking authorization to continue to support its business operations during the transaction process, including authority to continue to pay wages and provide health and other employee benefits without interruption and to continue programs that support VER's service to its customers.

We are pleased to enter into this agreement with VER and partner with GSO, said Jere Harris, chairman/CEO, PRG. VER's terrific client base and vast product and service offerings are a natural complement to our business. Upon completion of the transaction, we look forward to working closely with the talented VER team to strengthen our business and deliver even greater value and service to our clients.

VER intends to pay suppliers in full under normal terms for goods and services provided after the April 5 filing date. Additional information is available on VER's website at VER.com/restructure. Court documents and additional information can be found at a dedicated website administrated by VER's claims agent, KCC, at www.kccllc.net/VER or by calling KCC at 877-634-7163 (toll-free) or 424-236-7219 (if outside of the U.S. or Canada).

Kirkland & Ellis LLP and Klehr Harrison Harvey Branzburg LLP are serving as VER's legal counsel, AlixPartners LLP as its restructuring advisor, and PJT Partners as its financial advisor. Skadden, Arps, Slate, Meagher & Flom LLP and Perella Weinberg Partners are serving as advisors to Bank of America Merrill Lynch. FTI Consulting and Morgan, Lewis & Bockius LLP are serving as advisors to GSO Capital Partners.

LINK:	https://www.sportsvideo.org/2018/04/05/ver-reorganizing-under-chapter-...
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