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Vertex Energy (NASDAQ: VTNR) has entered into a Restructuring Support Agreement (RSA) with 100% support from its term loan lenders. To implement the RSA and explore potential sale options, Vertex has initiated Chapter 11 proceedings in the U.S. Bankruptcy Court for the Southern District of Texas. The company has secured $80 million in new Debtor-In-Possession financing to maintain normal business operations during this process.
CEO Benjamin P. Cowart expressed confidence in the restructuring process, emphasizing the continued support from lenders and the company’s critical role in the specialty refinery sector. Vertex aims to strengthen its foundation for growth and stability through this restructuring. The company plans to operate as usual and has filed customary first-day motions. Vertex anticipates confirming their Chapter 11 plan by the end of the year.
Vertex Energy (NASDAQ: VTNR) ha stipulato un Accordo di Sostegno alla Ristrutturazione (RSA) con il supporto totale dei suoi finanziatori a lungo termine. Per implementare l’RSA ed esplorare opzioni di vendita potenziali, Vertex ha iniziato le procedure del Capitolo 11 presso il Tribunale Fallimentare degli Stati Uniti per il Distretto Meridionale del Texas. L’azienda ha ottenuto 80 milioni di dollari in nuovi finanziamenti Debtor-In-Possession per mantenere le normali operazioni aziendali durante questo processo.
Il CEO Benjamin P. Cowart ha espresso fiducia nel processo di ristrutturazione, sottolineando il continuo supporto da parte dei finanziatori e il ruolo cruciale dell’azienda nel settore delle raffinerie speciali. Vertex mira a rafforzare le proprie basi per la crescita e la stabilità attraverso questa ristrutturazione. L’azienda prevede di operare come al solito e ha presentato le consuete mozioni per il primo giorno. Vertex prevede di confermare il proprio piano del Capitolo 11 entro la fine dell’anno.
Vertex Energy (NASDAQ: VTNR) ha entrado en un Acuerdo de Apoyo a la Reestructuración (RSA) con el apoyo total de sus prestamistas de préstamos a plazo. Para implementar el RSA y explorar opciones de venta potenciales, Vertex ha iniciado procedimientos del Capítulo 11 en el Tribunal de Quiebras de EE. UU. para el Distrito Sur de Texas. La empresa ha asegurado 80 millones de dólares en nueva financiación Debtor-In-Possession para mantener las operaciones comerciales normales durante este proceso.
El CEO Benjamin P. Cowart expresó confianza en el proceso de reestructuración, enfatizando el apoyo continuo de los prestamistas y el papel crítico de la empresa en el sector de refinación especial. Vertex tiene como objetivo fortalecer su base para el crecimiento y la estabilidad a través de esta reestructuración. La empresa planea operar como de costumbre y ha presentado las mociones habituales del primer día. Vertex anticipa confirmar su plan del Capítulo 11 para fin de año.
Vertex Energy (NASDAQ: VTNR)는 장기 대출업체의 100% 지원을 받는 재구성 지원 계약(RSA)을 체결했습니다. RSA를 실행하고 잠재적 매각 옵션을 탐색하기 위해 Vertex는 미국 텍사스 남부 파산 법원에서 11장 절차를 개시했습니다. 이 회사는 이 과정에서 정상적인 비즈니스 운영을 유지하기 위해 8000만 달러의 새로운 채무자 점유 금융을 확보했습니다.
CEO인 Benjamin P. Cowart는 재구성 과정에 대한 자신감을 표현하며, 대출자들로부터의 지속적인 지원과 회사가 전문 정유 분야에서 차지하는 중요한 역할을 강조했습니다. Vertex는 이번 재구성을 통해 성장과 안정성을 위한 기반을 강화하는 것을 목표로 합니다. 회사는 평소처럼 운영할 계획이며 첫날의 관행적인 신청서를 제출했습니다. Vertex는 연말까지 11장 계획을 확정할 것으로 예상합니다.
Vertex Energy (NASDAQ: VTNR) a conclu un Accord de Soutien à la Restructuration (RSA) avec le soutien à 100 % de ses prêteurs de prêts à terme. Afin de mettre en œuvre l’RSA et d’explorer des options de vente potentielles, Vertex a initié une procédure au Chapitre 11 auprès du Tribunal des faillites des États-Unis pour le District Sud du Texas. L’entreprise a sécurisé 80 millions de dollars en nouveaux financements Debtor-In-Possession pour maintenir les opérations commerciales normales pendant ce processus.
Le PDG Benjamin P. Cowart a exprimé sa confiance dans le processus de restructuration, soulignant le soutien continu des prêteurs et le rôle crucial de l’entreprise dans le secteur des raffineries spéciales. Vertex vise à renforcer sa base pour la croissance et la stabilité grâce à cette restructuration. L’entreprise prévoit de fonctionner normalement et a déposé les motions habituelles pour le premier jour. Vertex s’attend à confirmer son plan du Chapitre 11 d’ici la fin de l’année.
Vertex Energy (NASDAQ: VTNR) hat eine Umstrukturierungsunterstützungsvereinbarung (RSA) mit 100% Unterstützung durch seine Terminkreditgeber abgeschlossen. Um die RSA umzusetzen und potenzielle Verkaufsoptionen zu prüfen, hat Vertex Kapitel 11 Verfahren beim US-Insolvenzgericht für den südlichen Distrikt von Texas eingeleitet. Das Unternehmen hat 80 Millionen Dollar in neuer Debtor-In-Possession-Finanzierung gesichert, um die regulären Geschäftsabläufe während dieses Prozesses aufrechtzuerhalten.
CEO Benjamin P. Cowart äußerte Vertrauen in den Umstrukturierungsprozess und betonte die fortdauernde Unterstützung durch die Kreditgeber sowie die wichtige Rolle des Unternehmens im Bereich der Spezialraffinerien. Vertex zielt darauf ab, seine Basis für Wachstum und Stabilität zu stärken durch diese Umstrukturierung. Das Unternehmen plant, wie gewohnt zu arbeiten, und hat die üblichen Erstanträge eingereicht. Vertex erwartet, seinen Plan nach Kapitel 11 bis Ende des Jahres zu bestätigen.
Positive
- 100% support from term loan lenders for the Restructuring Support Agreement
- $80 million in new Debtor-In-Possession financing secured to support operations
- Potential for a more value-maximizing sale transaction
- Continued normal business operations during the restructuring process
Negative
- Commencement of Chapter 11 bankruptcy proceedings
- Need for financial restructuring indicates significant financial challenges
- Potential uncertainty for shareholders during the restructuring process
Insights
Vertex Energy’s decision to file for Chapter 11 bankruptcy and enter into a Restructuring Support Agreement (RSA) with its lenders is a significant development that signals severe financial distress. The $80 million debtor-in-possession financing provides short-term liquidity but also indicates the company’s urgent need for capital to maintain operations.
This move is likely to result in substantial changes to Vertex’s capital structure and ownership. The expedited timeline, aiming to confirm a Chapter 11 plan by year-end, suggests a pre-packaged bankruptcy that could lead to a quicker emergence. However, the exploration of a “more value-maximizing sale transaction” opens the possibility of the company being acquired or broken up.
For investors, this news is highly negative in the short term. Existing shareholders face potential significant dilution or complete loss of equity value. The stock is likely to be delisted from NASDAQ, further impacting liquidity. Long-term implications depend on the outcome of the restructuring or sale process, but the company’s ability to emerge as a viable entity remains uncertain.
The voluntary Chapter 11 filing by Vertex Energy presents a complex legal scenario with several key points to consider:
- The unanimous support from term loan lenders for the RSA suggests a smoother restructuring process, potentially reducing time in bankruptcy court.
- The $80 million DIP financing provides important working capital but will likely take priority over existing debt, potentially impacting recovery for other creditors.
- The filing of a Chapter 11 plan and bidding procedures on day one indicates a well-prepared strategy, possibly leading to a faster resolution.
- The exploration of a sale transaction alongside the restructuring plan creates optionality but may complicate proceedings if multiple interested parties emerge.
Stakeholders should closely monitor court filings and any objections from unsecured creditors or equity holders, as these could influence the restructuring outcome. The expedited timeline targeted by Vertex may face challenges if disputes arise, potentially extending the bankruptcy process.
- Enters into Restructuring Support Agreement with Lenders to Commence Expedited Voluntary Chapter 11 Proceeding
- $80 Million in New Debtor-In-Possession Financing to Fully Support Day-to-Day Business Operations
- Consensual Deal to Consummate a Chapter 11 Plan and/or Pursue a More Value-Maximizing Sale Transaction
HOUSTON–(BUSINESS WIRE)– Vertex Energy, Inc. (NASDAQ: VTNR) (“Vertex” or the “Company”), a leading specialty refiner and marketer of high-quality refined products, today announced it entered into a Restructuring Support Agreement (the “RSA”) with overwhelming support of 100% of the Company’s term loan lenders (the “Consenting Term Loan Lenders”). To facilitate the transactions contemplated under the RSA, including exploration of a sale transaction, the Company commenced Chapter 11 cases in the United States Bankruptcy Court for the Southern District of Texas.
Benjamin P. Cowart, President and CEO of Vertex, stated, “As we enter this next phase of our restructuring process through a formal proceeding, we are appreciative of the continued support from our lenders. Their confidence in our business, as demonstrated by this ongoing collaboration, reinforces the critical role Vertex plays in the specialty refinery space. We want to thank our employees for continuing to be fully engaged as we go through this process and prioritizing safety and customer satisfaction above all else. Together with our lenders, we feel confident this decision provides the best pathway toward future success.”
Chief Restructuring Officer, Seth Bullock of Alvarez & Marsal, added: “We have gained significant momentum with the partnership of Vertex’s lenders over the last several months and believe the restructuring support agreement and related milestones will allow the Company to initiate a fresh start and improve long-term value as it singularly concentrates on strengthening its foundation for continued growth and stability.”
The Company has filed customary first day motions and plans to operate its business in the ordinary course as it explores a holistic restructuring strategy pursuant to the terms of the RSA. To fund this process and continue operating in the ordinary course, the Consenting Term Loan Lenders have agreed to provide the Company with an additional $80 million Debtor-In-Possession financing facility subject to certain terms and the satisfaction of certain conditions precedent. The Company has also filed a Chapter 11 plan and bidding procedures, and anticipates confirming their Chapter 11 plan by the end of the year.
Kirkland & Ellis is serving as restructuring counsel, Bracewell LLP is serving as restructuring co-counsel, Perella Weinberg Partners is serving as the investment banker, and Alvarez & Marsal is serving as the Chief Restructuring Officer and financial advisor to the Company.
ABOUT VERTEX ENERGY
Vertex is a leading energy transition company that specializes in producing high-quality refined products. The Company’s innovative solutions are designed to enhance the performance of its customers and partners while also prioritizing sustainability, safety, and operational excellence. With a commitment to providing superior products and services, Vertex is dedicated to shaping the future of the energy industry.
FORWARD-LOOKING STATEMENTS
Certain of the matters discussed in this communication which are not statements of historical fact constitute forward-looking statements within the meaning of the securities laws, including the Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. Words such as “strategy,” “expects,” “continues,” “plans,” “anticipates,” “believes,” “would,” “will,” “estimates,” “intends,” “projects,” “goals,” “targets” and other words of similar meaning are intended to identify forward-looking statements but are not the exclusive means of identifying these statements. Any statements made in this news release other than those of historical fact, about an action, event or development, are forward-looking statements. The important factors that may cause actual results and outcomes to differ materially from those contained in such forward-looking statements include, without limitation, the Company’s ability to complete the restructuring and its ability to continue operating in the ordinary course while the Chapter 11 cases are pending, the Company’s ability to successfully complete a restructuring under Chapter 11, including: consummation of the restructuring; potential adverse effects of the Chapter 11 cases on the Company’s liquidity and results of operations; the Company’s ability to obtain timely approval by the bankruptcy court with respect to the motions filed in the Chapter 11 cases; objections to the Company’s recapitalization process or other pleadings filed that could protract the Chapter 11 cases; employee attrition and the Company’s ability to retain senior management and other key personnel due to distractions and uncertainties; the Company’s ability to comply with financing arrangements; the Company’s ability to maintain relationships with suppliers, customers, employees and other third parties and regulatory authorities as a result of the Chapter 11 cases; the effects of the Chapter 11 cases on the Company and on the interests of various constituents, including holders of the Company’s common stock; the bankruptcy court’s rulings in the Chapter 11 cases, including the approvals of the terms and conditions of the restructuring and the outcome of the Chapter 11 cases generally; the length of time that the Company will operate under Chapter 11 protection and the continued availability of operating capital during the pendency of the Chapter 11 cases; risks associated with third party motions in the Chapter 11 cases, which may interfere with the Company’s ability to consummate the restructuring or an alternative restructuring; increased administrative and legal costs related to the Chapter 11 process; and other litigation and inherent risks involved in a bankruptcy process; the future production of the Company’s Mobile Refinery; anticipated and unforeseen events which could reduce future production at the refinery or delay future capital projects, and changes in commodity and credit values; throughput volumes, production rates, yields, operating expenses and capital expenditures at the Mobile Refinery; the need for additional capital in the future, including, but not limited to, in order to complete capital projects and satisfy liabilities, including to pay amounts owed under the Company’s outstanding term loan, the Company’s ability to raise such capital in the future, and the terms of such funding, including dilution caused thereby; the future production of the Mobile Refinery, including but not limited to, renewable diesel and conventional production and the breakdown between the two; changes in commodity and credits values; certain early termination rights associated with third party agreements and conditions precedent to such agreements; certain mandatory redemption provisions of the outstanding senior convertible notes, the conversion rights associated therewith, and dilution caused by conversions and/or the exchanges of convertible notes; the Company’s ability to comply with required covenants under outstanding senior notes and a term loan and to pay amounts due under such senior notes and term loan, including interest and other amounts due thereunder; the ability of the Company to retain and hire key personnel; the level of competition in the Company’s industry and its ability to compete; the Company’s ability to respond to changes in its industry; the loss of key personnel or failure to attract, integrate and retain additional personnel; the Company’s ability to obtain and retain customers; the Company’s ability to produce products at competitive rates; the Company’s ability to execute its business strategy in a very competitive environment; trends in, and the market for, the price of oil and gas and alternative energy sources; the impact of inflation and interest rates on margins and costs; the volatile nature of the prices for oil and gas caused by supply and demand, including volatility caused by the ongoing Ukraine/Russia conflict and/or the Israel/Hamas conflict, changes in interest rates and inflation, and potential recessions; the Company’s ability to maintain relationships with partners; the outcome of pending and potential future litigation, judgments and settlements; rules and regulations making the Company’s operations more costly or restrictive; volatility in the market price of compliance credits (primarily Renewable Identification Numbers (RINs) needed to comply with the Renewable Fuel Standard (“RFS”)) under renewable and low-carbon fuel programs and emission credits needed under other environmental emissions programs, the requirement for the Company to purchase RINs in the secondary market to the extent it does not generate sufficient RINs internally, liabilities associated therewith and the timing, funding and costs of such required purchases, if any; changes in environmental and other laws and regulations and risks associated with such laws and regulations; economic downturns both in the United States and globally, changes in inflation and interest rates, increased costs of borrowing associated therewith and potential declines in the availability of such funding; risk of increased regulation of the Company’s operations and products; disruptions in the infrastructure that the Company and its partners rely on; interruptions at the Company’s facilities; unexpected and expected changes in the Company’s anticipated capital expenditures resulting from unforeseen and expected required maintenance, repairs, or upgrades; the Company’s ability to acquire and construct new facilities; decreases in global demand for, and the price of, oil, due to inflation, recessions or other reasons, including declines in economic activity or global conflicts; expected and unexpected downtime at the Company’s facilities; the Company’s level of indebtedness, which could affect its ability to fulfill its obligations, impede the implementation of its strategy, and expose the Company’s interest rate risk; dependence on third party transportation services and pipelines; risks related to obtaining required crude oil supplies, and the costs of such supplies; counterparty credit and performance risk; unanticipated problems at, or downtime effecting, the Company’s facilities and those operated by third parties; risks relating to the Company’s hedging activities or lack of hedging activities; and risks relating to future divestitures, asset sales, joint ventures and acquisitions.
Other important factors that may cause actual results and outcomes to differ materially from those contained in the forward-looking statements included in this communication are described in the Company’s publicly filed reports, including, but not limited to, the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, and the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, and future Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q. These reports are available at www.sec.gov. The Company cautions that the foregoing list of important factors is not complete. All subsequent written and oral forward-looking statements attributable to the Company or any person acting on behalf of the Company are expressly qualified in their entirety by the cautionary statements referenced above. Other unknown or unpredictable factors also could have material adverse effects on Vertex’s future results. The forward-looking statements included in this press release are made only as of the date hereof. Vertex cannot guarantee future results, levels of activity, performance or achievements. Accordingly, you should not place undue reliance on these forward-looking statements. Finally, Vertex undertakes no obligation to update these statements after the date of this release, except as required by law, and takes no obligation to update or correct information prepared by third parties that are not paid for by Vertex. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240923854192/en/
INVESTOR CONTACT
Source: Vertex Energy, Inc.
FAQ
Why did Vertex Energy (VTNR) file for Chapter 11 bankruptcy?
Vertex Energy filed for Chapter 11 to facilitate transactions under a Restructuring Support Agreement and explore potential sale options, aiming to achieve a more sustainable capital structure and improve long-term value.
How much new financing did Vertex Energy (VTNR) secure for its restructuring process?
Vertex Energy secured $80 million in new Debtor-In-Possession financing to support its day-to-day business operations during the Chapter 11 process.
When does Vertex Energy (VTNR) expect to confirm its Chapter 11 plan?
Vertex Energy anticipates confirming their Chapter 11 plan by the end of the year.
Will Vertex Energy (VTNR) continue normal business operations during the restructuring?
Yes, Vertex Energy plans to operate its business in the ordinary course while exploring a holistic restructuring strategy under the terms of the Restructuring Support Agreement.
