December 8, 2015

Hanger Announces Amendment to Amended and Restated Consent Solicitation

Content provided by The O&P EDGE
Current Issue - Free Subscription - Free eNewsletter - Advertise

On December 7, Hanger, Austin, Texas, submitted Current Report on Form 8-K to the U.S. Securities and Exchange Commission (SEC) announcing an amendment to the November 30 consent solicitation relating to its $200 million aggregate principal amount 7⅛ percent senior notes due 2018, issued under the November 2, 2010, indenture, with Wilmington Trust Company, as trustee. Upon approval by noteholders, the amendment will, among other things, (i) amend the termination date of the Proposed Amendment and Waiver to August 31, 2016; (ii) revise the definition of “permitted liens” in the indenture, to limit the company’s ability to incur secured debt in an amount not to exceed $375 million, except as may be incurred to refinance the notes, until such time as the company is current in its periodic reporting obligations with the SEC; (iii) include in the indenture a new reporting covenant relating to certain cash flows and other data, if the company in its sole determination concludes that providing such information can be done in compliance with its obligations under applicable securities laws, until such time as the company is current in its periodic reporting obligations with the SEC; and (iv) amend the expiration date of the Consent Solicitation to December 11.

As previously disclosed, Hanger did not timely file with the SEC its Annual Report on Form 10-K for the fiscal year ended December 31, 2014, and its Quarterly Reports on Form 10-Q for the periods ended September 30, 2014; March 31, June 30, and September 30, 2015. Hanger said the earliest it will likely commence making its filings with the SEC is the first quarter 2016 and also anticipated that it will not be able to timely file its Annual Report on Form 10-K for the year ending December 31, 2015.

Approval of noteholders of the proposed amendment and waiver pursuant to the terms of the consent solicitation will nullify and void the default notice Hanger received from Wilmington on November 25, and will also result in the withdrawal of the default notice pursuant to the terms of the credit agreement with Bank of America.

The company said that if it is unable to come to satisfactory resolution with the lenders under its credit agreement or the holders of its notes and were to face acceleration of its outstanding debt, then it would need to seek alternative financing. However, this alternative financing may not be available to the company on terms that are favorable to it, or at all, according to the announcement.

Bookmark and Share