May 20th, 2013 | Published in Business
AMF Bowling Worldwide Inc. and certain of its affiliates filed a new chapter 11 plan of reorganization and disclosure statement Saturday, sponsored by Strike Holdings LLC (known as Bowlmor) and certain of AMF’s second lien lenders, including Cerberus Series Four Holdings, LLC and Credit Suisse.
As first reported on BowlersJournal.com, the plan provides that AMF will be reorganized and combined with Bowlmor to form a company that will be known as Bowlmor AMF, which would be the largest operator of bowling centers in the world with 7,500 employees, 276 bowling centers and combined annual revenues of approximately $450 million.
The plan provides that AMF’s second lien lenders will convert their debt into equity in Bowlmor AMF, so that Bowlmor AMF will be owned jointly by the financial institutions that hold AMF’s second lien debt and by equity holders in Bowlmor. Credit Suisse will provide a term loan facility in the principal amount of $230 million, and a revolving loan facility in the principal amount of $30 million.
The largest holders of AMF’s existing second lien debt have expressed their confidence in the new company by providing $50 million of backstop financing, which will be used to provide working capital for Bowlmor AMF and to pay cash distributions in varying amounts to AMF’s other creditors.
In addition to second lien lenders, the plan has the support of the Official Committee of Unsecured Creditors. AMF’s first lien lenders will receive payment in full, in cash, of principal, interest at the non-default rate, and their fees.
“The prospect of combining Bowlmor’s proven approach to operations and marketing with the AMF brand, its large number of locations and national market penetration represents an exciting opportunity for both companies,” said Bowlmor’s founder and CEO, Tom Shannon, who will serve as the chairman, CEO and president of the combined company. “The combination will not only result in a strong company, but also the best bowling experience possible. We are committed to making Bowlmor AMF a truly great company for the bowling public, our partners and our employees.”
Joining Shannon on Bowlmor AMF’s executive team will be Bowlmor President and Chief Financial Officer Brett Parker, who will become Vice Chairman, CFO and EVP of Bowlmor AMF. The new Bowlmor AMF will be jointly owned by AMF’s existing second lien lenders, who will hold 77.53%, and Shannon and Parker, who will collectively hold 22.47% of the new company.
Steve Satterwhite, AMF’s Chief Operating Officer and Chief Financial Officer, said, “AMF’s operational and financial performance through our reorganization process has set the stage for a successful emergence from bankruptcy. It is thanks to the dedication and hard work of AMF’s employees and management team that we recently posted the best same store sales growth since 2007 and the highest profitability since 2009, achieving impressive results despite the challenges of the restructuring and economic conditions.”
The next step in this process is a hearing set for tomorrow, at which the Bankruptcy Court in Virginia overseeing AMF’s chapter 11 case will be asked to approve the disclosure statement so that the plan can be sent to AMF’s creditors for approval. Assuming that the Bankruptcy Court approves the disclosure statement, the plan will be sent out for a vote, and the Bankruptcy Court will schedule a hearing to confirm the plan.
Pending court approval, AMF could emerge from bankruptcy and combine with Bowlmor by the end of June.