Davis Polk & Wardwell is serving as lead counsel to Frontier Airlines Holdings Inc. in securing a $75 million DIP financing commitment from Washington, DC private equity firm Perseus LLC, as part of its Chapter 11 reorganization. Perseus would also serve as equity sponsor for Frontier's plan of reorganization, allowing Perseus to purchase 79.9% of the equity in the reorganized company for $100 million. The DIP facility and plan sponsorship are subject to bankruptcy court approval and various other conditions.
Frontier operates jet service carriers linking its Denver hub to 46 cities coast-to-coast, 8 cities in Mexico and 1 city in Canada. Frontier Holdings and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the US Bankruptcy Code on April 10, 2008, in the Southern District of New York. On July 25, Frontier filed motions with the Bankruptcy Court for the Southern District of New York seeking approval of the proposed DIP financing and plan sponsorship proposal. Under the terms of the proposed DIP credit facility, Frontier will be able to access a $40 million first tranche immediately upon court approval and $35 million when the plan sponsorship agreement and final DIP order are approved at a later date.
The Davis Polk corporate team includes partners Juliet Cain, Marshall S. Huebner and Nancy L. Sanborn, counsel Timothy Graulich, associates Karla Booth, Jason Kyrwood, Hugh McCullough, Damian S. Schaible, H. Oliver Smith, Hilary Dengel, Pheabe S. Morris, Carson T. Stewart, Eli James Vonnegut, Alexander Young-Anglim, and summer associate Marissa A.L. Jackson. Counsel Betty Moy Huber and associate Elisabeth Hanratty are providing environmental law advice. Partner Kathleen L. Ferrell and associates Joshua Ruland and Ari Weinstein are providing tax advice. Partner Jean M. McLoughlin, counsel George R. Ince Jr. and associate Ada Dekhtyar Karczmer are providing employment law advice. Alfonso Silva is the legal assistant on the deal. All members of the Davis Polk team work in the New York office.
Davis Polk & Wardwell advised MicroCredit Enterprises (MCE) on its $10.2 million line of credit and term loan facility with First Republic Bank, a division of Merrill Lynch Bank & Trust Co., FSB. The facility will be used by MCE to provide loans to overseas microfinance institutions which, in turn, will provide small business loans to poor entrepreneurs in developing countries.
Headquartered in Sacramento, California, MCE is a non-profit public charity committed to reducing poverty by mobilizing private investment capital to finance micro-businesses of poor families throughout the developing world. Davis Polk represented MCE on a pro bono basis.
The Davis Polk corporate team included partner Julia K. Cowles and associate Vincent T. Cannon, both of the Menlo Park office. Partner Peter S.W. Levin and associates Jason Kyrwood and Norberto E. Quintana, all of the New York office, provided credit advice.
Davis Polk & Wardwell advised Tekni-Plex, Inc. on an out-of-court restructuring of its balance sheet, pursuant to which over $300 million of its 12.75% senior subordinated notes due 2010 were exchanged for common stock, the company’s preferred stock was exchanged for three series of warrants and the company’s existing common stock was repurchased by the company. Davis Polk also advised Tekni-Plex on an upsizing of its credit facility to $110 million.
Tekni-Plex is a global, diversified manufacturer of packaging, packaging products and materials, as well as tubing products. The company primarily serves the food, health care and consumer markets. Tekni-Plex has operations in the United States, Europe, China, Argentina and Canada.
The Davis Polk team included partners Lawrence E. Wieman, Marshall S. Huebner and Michael Kaplan, and associates Jean Weng, Brian M. Resnick, Hugh McCullough, Joanna A. McGinley, Florian Feder, Alexander N. Macleod (not yet admitted) and Hilary Dengel (not yet admitted). Additionally, partner Gail A. Flesher and associate Brianne M. Lucyk provided environmental advice, partner Kathleen L. Ferrell and associate Joshua Ruland provided tax advice, associate Ada Dekhtyar provided executive compensation and employee benefits advice and counsel Susan D. Kennedy provided real estate advice. All members of the Davis Polk team are based in the New York office.
Davis Polk & Wardwell is advising Health Management Associates, Inc. (HMA) on its balance sheet recapitalization. HMA owns and operates general acute care hospitals in non-urban communities located throughout the United States.
Under its plan, HMA will recapitalize its balance sheet through $3.25 billion of new senior secured credit facilities, including the refinancing of amounts outstanding under its current revolving line of credit. As part of the recapitalization, HMA will return approximately $2.4 billion to shareholders through a $10.00 per share one-time special cash dividend. HMA’s board of directors has unanimously approved the recapitalization plan.
The Davis Polk corporate team includes partners George R. Bason Jr. and Leonard Kreynin and associate Miranda So. Partner Joseph P. Hadley and associates Dahlia Jacobs Prager and Adi David are providing credit advice. Partner Kyoko Takahashi Lin is providing employment advice. Counsel Susan D. Kennedy and associate Jason Blacksberg are providing real estate advice. All members of the Davis Polk team work in the New York office.
Davis Polk & Wardwell is advising Ford Motor Company on the proposed restructuring of its relationship with Visteon Corporation. Visteon is a Michigan-based automotive components manufacturer and Ford's largest supplier. Visteon was spun off from Ford in 2000.
According to the terms of the memorandum of understanding announced today, Visteon will transfer 24 of its plants and facilities in the United States and Mexico to a temporary business entity controlled by Ford. Ford will also receive warrants to purchase up to 25 million shares of Visteon common stock at $6.90 per share.
Ford will pay Visteon approximately $300 million for inventory and $550 million to assist with Visteon's restructuring. Additionally, Ford will forgive Visteon's remaining obligation to fund approximately $800 million in post-retirement health care and life insurance benefit obligations (OPEB) related to Ford's Visteon-assigned United Auto Workers (UAW) employees and a portion of Visteon's salaried OPEB obligation for former Ford employees and retirees. Ford will also extend to Visteon a $250 million secured loan to repay debt maturing on August 1, 2005.
The transaction is subject to execution of definitive agreements and customary closing conditions and ratification by Ford-UAW hourly employees affected by the proposed agreement. The transaction is expected to close by September 30, 2005.
The Davis Polk corporate team includes partners Paul R. Kingsley and Donald S. Bernstein and associates Michael Davis and H. Oliver Smith. Partner Kathleen L. Ferrell is providing tax advice. Partner Thomas Patrick Dore Jr. and counsel Joseph J. Sperber are providing real estate advice. Partner Gail A. Flesher is providing environmental advice. Counsel John T. Wright is providing employment advice. Associate Lori Fields is providing intellectual property advice. All lawyers work in the New York office.
Davis Polk & Wardwell advised SMART Modular Technologies (WWH), Inc. on its $125 million recapitalization. As part of the recapitalization, SMART Modular issued and sold $125 million of senior secured floating-rate notes due 2012. SMART Modular also entered into a new $35 million senior secured revolving credit facility that was undrawn at closing. SMART Modular used the net proceeds of the offering to repay existing credit facility debt, redeem approximately $65.1 million of preferred stock and the balance for general corporate purposes.
Based in Fremont, California, SMART Modular is a leading independent designer, manufacturer and supplier of memory products and related services focused on original equipment manufacturers. SMART Modular provides customers with technologically advanced memory products as well as comprehensive design, manufacturing, testing and logistics services. Texas Pacific Group, Francisco Partners and Shah Capital Partners are SMART Modular's shareholders.
The Davis Polk capital markets team included partner Alan F. Denenberg and associates Afra Afsharipour, Michael Nordtvedt and Nandan Kamath, all of the Menlo Park office. Partner Jean M. McLoughlin of the Menlo Park office provided employee benefits advice. Partner Karin S. Day and associate Lina E. Ziurys provided credit advice, partner Harry Ballan and associate Christopher Peters provided tax advice and associates Kelly Ann Finley and Yelena Lungin provided Investment Company Act advice, and are all of the New York office. Eric C. Valle, Edna S. Kwong, Cari M. Hebel and Karla K. Rogers, all of the Menlo Park office, were the legal assistants on the transaction.
Davis Polk & Wardwell advised Mueller Holdings (N.A.), Inc. in connection with its $1.15 billion recapitalization. As part of the recapitalization, Mueller issued and sold units consisting of 14.75-percent senior discount notes due 2014 in an aggregate principal amount at maturity of $223 million and warrants to purchase Mueller Holdings common stock; and its subsidiary, Mueller Group, Inc. issued and sold $100 million of second-priority senior secured floating-rate notes due 2011 and $315 million of 10-percent senior subordinated notes due 2012. Mueller Group also entered into a $625 million amended and restated senior secured credit facility, which provided for $545 million of term loans and an $80 million revolving credit facility. Mueller used the net proceeds of the offerings and term loan borrowings to repay existing credit facility debt; pay a dividend to its common equity holders, including DLJ Merchant Banking Partners II, L.P. and related funds, of approximately $400 million in the aggregate; and redeem approximately $110 million of preferred stock.
Based in Decatur, Illinois, Mueller is a leading North American manufacturer of a broad range of flow control products for use in water distribution networks, water and wastewater treatment facilities, gas distribution systems and piping systems.
The Davis Polk capital markets team included partners Michael Kaplan and Richard D. Truesdell Jr. and associates Michael Nordtvedt, Laura M. Nardone, Jason H. Pan, Charles P. Bronowski and Jared G. Jensen. Partner Lawrence E. Wieman and associates James C. O'Brien and Kimberly E. Epstein provided credit advice. Partner Kathleen L. Ferrell and associates Raymond J. Holst and Melissa E. Loewenstern provided tax advice. Associate Kyoko Takahashi provided benefits advice. Counsel Betty Moy and associate Jason M. Licht provided environmental advice. Counsel Susan D. Kennedy and associate Charles J. Harary provided real estate advice. Kathryn Holden, Moonsun M. Kang and James F. Henderson were the legal assistants on the transaction. All members of the Davis Polk team work in the New York office.
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