- 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
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20240923854192/en/
INVESTOR CONTACT IR@vertexenergy.com
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