Receives Commitment from Existing Secured
Lenders for $15.0 Million in Debtor-in-Possession
Financing
HOUSTON, Aug. 23,
2023 /PRNewswire/ -- Orbital Infrastructure Group
Inc. (NASDAQ: OIG) (the "Company"), announced today that
it and certain of its subsidiaries (Orbital Solar
Services, L.L.C., Orbital Power, Inc., Orbital Gas Systems,
North America, and Eclipse
Foundation Group, Inc.) have filed voluntary Chapter 11 petitions
in the U.S. Bankruptcy Court for the Southern District of
Texas (the "Bankruptcy Court").
The filing specifically excludes Front Line Power Construction
("FLP") and Gibson Technical Services ("GTS"), which are being sold
separately as described below.
The Sale Transactions
The Company and the FLP secured lenders (the "FLP Lenders")
intend to enter into a purchase agreement pursuant to which the FLP
Lenders will designate an entity to acquire the equity interests in
FLP. The Company and the GTS secured lender (the "GTS Lender")
intend to enter into a purchase agreement pursuant to which the GTS
Lender will designate an entity to acquire the equity interests in
GTS.
Jim O'Neil, Vice-Chairman and CEO
of the Company, stated: "Having carefully reviewed all available
options, our comprehensive strategic alternatives process has
concluded. The Chapter 11 filing is not the outcome we would have
wanted for our stockholders or the stakeholders, but this difficult
decision was necessary to sell the primary and profitable parts of
the Company as going concerns."
The transactions with the FLP Lenders and the GTS Lender are
part of a sale process under Section 363 of the Bankruptcy Code in
which the Lenders are the "stalking horse" bidders. The purchase
agreements between the Company and the FLP Lenders, and between the
Company the GTS
Lender, contain the terms against which
competing offers will be solicited and evaluated during a Chapter
11 auction process. The Company is seeking Bankruptcy Court
approval of bidding procedures allowing for the submission of
highest and best purchase offers. Any sale will be subject to
Bankruptcy Court approval. The Company will manage the bidding
process and evaluate any bids received, in consultation with its
advisors and otherwise in accordance with the
bidding procedures and oversight by the Bankruptcy Court.
Under the purchase agreements, successful
purchasers
will not acquire the Company's other
subsidiaries (Orbital Infrastructure Group, Inc., Orbital Solar
Services, L.L.C., Orbital Power, Inc., Orbital Gas Systems,
North America, Eclipse Foundation
Group, Inc.).
DIP Financing
To provide necessary funding during the Chapter 11 proceeding,
the Company has
received commitments for two debtor-in-possession ("DIP") financing credit agreements with
the FLP Lenders and the GTS Lender. Upon approval by the Bankruptcy
Court, the DIP financing agreements are expected to provide the
Company with the necessary liquidity to permit the Company to
operate in the ordinary course of business throughout the Chapter
11 proceedings and close the sale transactions. The DIP financing
will provide $15.0 million of
incremental liquidity following the petition filing.
About Orbital
Orbital Infrastructure Group, Inc. [NASDAQ: OIG] is a
diversified infrastructure services platform, providing
engineering, design, construction, and maintenance services to
customers in three operating segments; electric power,
telecommunications, and renewables.
For more information please visit:
http://www.orbitalenergygroup.com
Forward-looking Statement Disclaimer
This press release contains "forward-looking statements" within
the meaning of the term set forth in the Private Securities
Litigation Reform Act of 1995. Forward-looking statements generally
use forward-looking words, such as "may," "will," "could,"
"should," "would,"
"project," "believe," "anticipate," "expect," "estimate," "continue," "potential," "plan," "forecast"
and other words that convey the uncertainty of future events or
outcomes. These forward- looking statements are not guarantees of
the Company's future performance and involve risks, uncertainties,
estimates and assumptions that are difficult to predict and may be
outside of the Company's control. Therefore, the Company's actual
outcomes and results may differ materially from those expressed in
or contemplated by the forward-looking statements. Factors and
uncertainties that may cause the Company's actual outcomes and
results to differ from those expressed in or contemplated by
forward-looking statements include, but are not limited to: risks
attendant to the Chapter 11 bankruptcy process, including the
Company's ability to obtain court approval from the Bankruptcy
Court with respect to motions or other requests made to the
Bankruptcy Court throughout the course of the Chapter 11 process,
including with respect to the sale of FLP and GTS and the
DIP credit agreements; the Company's plans to sell certain assets
pursuant to Chapter 11 of the U.S. Bankruptcy Code, the outcome and
timing of such sale, and the Company's ability to satisfy closing
and other conditions to such sale; the effects of Chapter
11, including increased legal and other professional costs
necessary to execute the Company's wind down, on the Company's
liquidity and results of operations (including the availability of
operating capital during the pendency of Chapter 11); the length of
time that the Company will operate under Chapter 11 protection and
the continued availability of operating capital during the pendency
of Chapter 11; the Company's ability to continue funding operations
through the Chapter 11 bankruptcy process, and the possibility that
it may be unable to obtain any additional funding as needed; the
Company's ability to meet its financial obligations during the
Chapter 11 process and to maintain contracts that are critical to
its operations; the Company's ability to comply with the
restrictions imposed by the terms and conditions of the DIP credit
agreements and other financing arrangements; objections to the
Company's wind down process, the DIP credit agreements, or other
pleadings filed that could protract Chapter 11; the effects of
Chapter 11 on the interests of various constituents and financial
stakeholders; the effect of the Chapter 11 filings and any
potential asset sale on the Company's relationships with
vendors, regulatory authorities, employees and other third parties;
possible proceedings that may be brought by third parties in
connection with the Chapter 11 process or the potential asset
sale and risks associated with third-party motions in Chapter 11;
the timing or amount of any distributions, if any, to the Company's
stakeholders; expectations regarding future performance of assets expected
to be sold in the bankruptcy process; employee
attrition and the Company's ability to retain senior management and
other key personnel due to the distractions and uncertainties; the
impact and timing of any cost-savings measures and related local
law requirements in various jurisdictions; the impact of litigation
and regulatory proceedings; expectations regarding financial
performance, strategic and operational plans, and other related
matters; and other factors discussed in the Company's filings with
the U.S. Securities and Exchange Commission, including the "Risk
Factors" section of the Annual Report on Form 10-K for its 2022
fiscal year. Any forward-looking statement speaks only as of the
date of this press release. Except as may be required by applicable
law, the Company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise, and you are cautioned not
to rely upon them unduly.
Contact Information
William Clough
Chairman and Chief Legal Counsel
(925) 989-6651
wclough@orbinf.com
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SOURCE Orbital Infrastructure Group, Inc.