Item 2.01 Completion of Acquisition or Disposition of Assets.
As previously disclosed, on May 8, 2022, Armstrong Flooring, Inc., a Delaware corporation (the “Company”), and its wholly owned subsidiaries Armstrong Flooring Latin America, Inc., a Delaware corporation (“AFI Latin America”), Armstrong Flooring Canada Ltd., a British Columbia corporation (“AFI Canada”), and AFI Licensing LLC, a Delaware limited liability company (“AFI Licensing” and, together with the Company, AFI Latin America and AFI Canada, the “Debtors”), filed voluntary petitions for relief under chapter 11 of title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”). The chapter 11 cases are being administered under the caption In re Armstrong Flooring, Inc., et al. (Case No. 22-10426) (the “Chapter 11 Cases”).
As previously disclosed, following evaluation of all qualified bids for the assets of the Company, the Company entered into: (a) a binding Asset Purchase Agreement (the “North America Purchase Agreement”), dated as of July 10, 2022, by and among the Debtors and a consortium of buyers consisting of AHF, LLC, a Delaware limited liability company, and Gordon Brothers Commercial & Industrial, LLC, a Delaware limited liability company, for the sale of substantially all of the Company’s North American assets for a purchase price of $107 million in cash (subject to certain adjustments) and assumption of certain specified liabilities, including certain cure claims and certain equipment leases; (b) a binding Asset Purchase Agreement (the “Australia Purchase Agreement”), dated as of July 11, 2022, by and among the Company and Armstrong Flooring Pty Ltd, an Australian company limited by shares (“AFI Australia”), and Braeside Mills Investments Pty Ltd, Gippsland Lakes Victoria Holdings Pty Ltd, and HS McKendrick Family Nominees Pty Ltd as trustee of the Mills Unit Trust, for the sale of substantially all of AFI Australia’s assets for a purchase price of $31 million in cash and the assumption of certain specified liabilities; and (c) a Stock Purchase Agreement (the “Asia Purchase Agreement”, and collectively with the North America Purchase Agreement and the Asia Purchase Agreement, the “Purchase Agreements”), dated as of July 11, 2022, by and between the Company and Zhejiang GIMIG Technology Co., Ltd., a company established under the laws of the People’s Republic of China (“Giant”), pursuant to which Giant agreed to purchase the equity interests of Armstrong Flooring Hong Kong Limited, a private company limited by shares incorporated in Hong Kong and wholly owned subsidiary of the Company (“AFI Hong Kong”), for a purchase price of $59 million in cash. The Purchase Agreements were approved by the Bankruptcy Court on July 13, 2022.
On August 1, 2022, the Company consummated the transactions contemplated by the Asia Purchase Agreement and closed on the sale of the equity interests of AFI Hong Kong to Giant. The Company continues to cooperate with the Bankruptcy Court and work alongside its secured creditors to continue operating its business in Australia while it closes the remaining sale transaction.
2