MCI completes restructuring plan

Posted on April 20, 2009

Motor Coach Industries emerged last Friday from its voluntary Chapter 11 reorganization. The United States Bankruptcy Court for the District of Delaware confirmed the Second Amended Joint Plan of Reorganization for MCI and certain of its affiliated companies on January 28, 2009.


"The completion of our financial restructuring is a major milestone in the 76-year history of MCI," said MCI's  President/CEO Tom Sorrells. "I am particularly pleased that, given a very challenging economic backdrop and the tight credit markets, we were able to complete the process in just seven months. This is a testament to the strong reputation and presence of our company in the industry and the unyielding commitment of Franklin Mutual Advisers LLC, our new majority shareholder, through the final negotiations.


"This achievement also reflects the dedication of all MCI employees who continued their focus on delivering quality coaches and customer service during this period. We are also extremely appreciative of the outstanding support we received from our lenders and legal and financial advisors in this process," added Sorrells.


Certain investment funds managed by Franklin Mutual Advisers LLC (FMA), a recognized and established global investment management firm, have become the company's majority shareholders through the conversion of third lien secured debt into common stock and the issuance of $200 million in new preferred stock. In conjunction with its emergence from Chapter 11, MCI has obtained $230 million of exit financing and consummated its pre-negotiated plan. GE Capital is the arranger and lead lender under a $75 million senior secured revolving credit facility. MCI has also arranged for a $155 million second lien term loan from a group of lenders.


The company was advised by Rothschild Inc., AlixPartners LLP and Simpson Thacher & Bartlett LLP. FMA was advised by Sills Cummis & Gross P.C. and Houlihan Lokey Howard & Zukin Capital Inc.


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