(NewsDirect)
Cooper-StandardHoldings Inc. (NYSE: CPS) (“CPS”) today announced it and certainof its subsidiaries had entered into a transaction support agreement(the “TSA”) with an ad hoc committee of holders (the “ConsentingNoteholders”) of approximately 62.7% of the aggregate principalamount of the 5.625% Senior Notes due 2026 (the “2026 SeniorNotes”) issued by Cooper-Standard Automotive Inc. (the“Company”).
The TSA contemplates the following transactions (the“Refinancing Transactions”):
Concurrent Notes Offering
A notes offering (the“Concurrent Notes Offering”) to holders of the 2026 Senior Notesto purchase for cash $580.0 million aggregate principal amount ofnewly issued 13.50% Cash Pay / PIK Toggle Senior Secured First LienNotes due 2027 (the “New First Lien Notes”). The Company intendsto use the proceeds from the New First Lien Notes, together with cashon hand, to prepay the Company’s existing senior term loan facility,redeem its 13.000% Senior Secured Notes due 2024 and pay related feesand expenses.
Exchange Offer
An exchange offer (the “Exchange Offer”)conducted by the Company for any and all of its $400.0 million inaggregate principal amount of 2026 Senior Notes to holders of 2026Senior Notes who participate in the Concurrent Notes Offering inexchange for newly issued 5.625% Cash Pay / 10.625% PIK Toggle SeniorSecured Notes due 2027 (the “New Secured Notes”) on a par-for-parbasis.
Consent Solicitation
The Company will seek, and holders of 2026Senior Notes who tender pursuant to the Exchange Offer will berequired to deliver, consents to amend the indenture under which the2026 Senior Notes were issued (the “2026 Senior Notes Indenture”)to remove substantially all of the covenants, certain events ofdefault and certain other provisions contained in the 2026 SeniorNotes and 2026 Senior Notes Indenture. In order to approve theamendment, consents must be delivered and not revoked in respect of atleast a majority of the outstanding principal amount of the 2026Senior Notes.
Backstop Agreement
The Consenting Noteholders (including certainother investors designated by the Consenting Noteholders, the“Backstop Parties”) have agreed in the TSA to enter into abackstop agreement (the “Backstop Agreement”) with the Companyprior to launch of the Refinancing Transactions, to purchase any NewFirst Lien Notes that are not otherwise subscribed for by holders ofthe 2026 Senior Notes in the Concurrent Notes Offering. Asconsideration for the Backstop Parties’ backstop commitment andpursuant to the terms and conditions set forth in the BackstopAgreement, the Backstop Parties will be entitled to receive a cashfee.
The Companyexpects to commence the Exchange Offer, Concurrent Notes Offering andConsent Solicitation in December.
The commencement and consummation of theRefinancing Transactions contemplated by the TSA will be conditionedon the satisfaction or waiver of certain conditions precedent,including finalizing all definitive documents. The RefinancingTransactions may not be completed as contemplated or at all. If theCompany is unable to complete the Refinancing Transactions or anyother alternative transactions, on favorable terms or at all, due tomarket conditions or otherwise, its financial condition could bematerially adversely affected.
This communication is for informational purposesonly and does not constitute an offer to sell, or a solicitation of anoffer to buy, any security and does not constitute an offer,solicitation or sale of any security in any jurisdiction in which suchoffer, solicitation or sale would be unlawful.
About Cooper Standard
CooperStandard, headquartered in Northville, Mich., with locations in 21countries, is a leading global supplier of sealing and fluid handlingsystems and components. Utilizing our materials science andmanufacturing expertise, we create innovative and sustainableengineered solutions for diverse transportation and industrialmarkets. Cooper Standard's approximately 23,000 employees are atthe heart of our success, continuously improving our business andsurrounding communities.
Forward Looking Statements
This press release includes “forward-lookingstatements” within the meaning of U.S. federal securities laws, andwe intend that such forward-looking statements be subject to the safeharbor created thereby. Our use of words “estimate,” “expect,”“anticipate,” “project,” “plan,” “intend,”“believe,” “outlook,” “guidance,” “forecast,” orfuture or conditional verbs, such as “will,” “should,”“could,” “would,” or “may,” and variations of such wordsor similar expressions are intended to identify forward-lookingstatements. All forward-looking statements are based upon our currentexpectations and various assumptions. Our expectations, beliefs, andprojections are expressed in good faith and we believe there is areasonable basis for them. However, we cannot assure you that theseexpectations, beliefs and projections will be achieved.Forward-looking statements are not guarantees of future performanceand are subject to significant risks and uncertainties that may causeactual results or achievements to be materially different from thefuture results or achievements expressed or implied by theforward-looking statements. Among other items, such factors mayinclude: Impacts, including our ability to launch and complete theRefinancing Transactions; commodity cost increases and disruptionsrelated to the war in Ukraine and the current COVID-related lockdownsin China; our ability to offset the adverse impact of higher commodityand other costs through negotiations with our customers; the impact,and expected continued impact, of the COVID-19 outbreak on ourfinancial condition and results of operations; significant risks toour liquidity presented by the COVID-19 pandemic risk; prolonged ormaterial contractions in automotive sales and production volumes; ourinability to realize sales represented by awarded business; escalatingpricing pressures; loss of large customers or significant platforms;our ability to successfully compete in the automotive parts industry;availability and increasing volatility in costs of manufacturedcomponents and raw materials; disruption in our supply base;competitive threats and commercial risks associated with ourdiversification strategy through our Advanced Technology Group;possible variability of our working capital requirements; risksassociated with our international operations, including changes inlaws, regulations, and policies governing the terms of foreign tradesuch as increased trade restrictions and tariffs; foreign currencyexchange rate fluctuations; our ability to control the operations ofour joint ventures for our sole benefit; our substantial amount ofindebtedness and variable rates of interest; our ability to refinanceour indebtedness and obtain adequate financing sources in the future;operating and financial restrictions imposed on us under our debtinstruments; the underfunding of our pension plans; significantchanges in discount rates and the actual return on pension assets;effectiveness of continuous improvement programs and other costsavings plans; manufacturing facility closings or consolidation; ourability to execute new program launches; our ability to meetcustomers’ needs for new and improved products; the possibility thatour acquisitions and divestitures may not be successful; productliability, warranty and recall claims brought against us; laws andregulations, including environmental, health and safety laws andregulations; legal and regulatory proceedings, claims orinvestigations against us; work stoppages or other labor disruptions;the ability of our intellectual property to withstand legalchallenges; cyber-attacks, data privacy concerns, other disruptionsin, or the inability to implement upgrades to, our informationtechnology systems; the possible volatility of our annual effectivetax rate; the possibility of a failure to maintain effective controlsand procedures; the possibility of future impairment charges to ourgoodwill and long-lived assets; our ability to identify, attract,develop and retain a skilled, engaged and diverse workforce; ourability to procure insurance at reasonable rates; and our dependenceon our subsidiaries for cash to satisfy our obligations; and otherrisks and uncertainties, including those detailed from time to time inthe Company’s periodic reports filed with the Securities andExchange Commission.
You should not place undue reliance on these forward-lookingstatements. Our forward-looking statements speak only as of the dateof this press release and we undertake no obligation to publiclyupdate or otherwise revise any forward-looking statement, whether as aresult of new information, future events or otherwise, except where weare expressly required to do so by law.
This press release also contains references toestimates and other information that are based on industrypublications, surveys and forecasts. This information involves anumber of assumptions and limitations, and we have not independentlyverified the accuracy or completeness of the information.
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Contact Details
Contact forAnalysts:
Roger Hendriksen
+1 248-596-6465
roger.hendriksen@cooperstandard.com
Contactfor Media:
Chris Andrews
+1 248-596-6217
CompanyWebsite
https://www.cooperstandard.com/
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