Transaction expected to provide additional
liquidity to help withstand near-term industrywide challenges
GrafTech International Ltd. (NYSE: EAF) (“GrafTech” or the
“Company”) today announced that it has entered into a commitment
and consent letter with lenders holding all of its existing
revolving commitments, an ad hoc group that holds over 81% of its
existing secured bonds to provide new debt financing on competitive
terms and extend maturities of its existing debt, and Barclays Bank
plc, as a fronting lender.
Pursuant to the terms of the commitment and consent letter,
GrafTech expects to (i) incur $175 million of new senior secured
first lien term loans on the closing date of the transaction (the
“Closing Date”), and obtain commitments with respect to $100
million of new senior secured first lien delayed draw term loans
that are available to the Company for 19 months following the
Closing Date, all of which would mature five years after the
Closing Date; (ii) launch offers to exchange its outstanding 4.625%
senior secured notes due 2028 and its 9.875% senior secured notes
due 2028 for new 4.625% second lien notes and new 9.875% second
lien notes, respectively, which would mature in 2029; (iii) launch
a consent solicitation to eliminate substantially all covenants and
events of default with respect to its outstanding senior secured
notes due 2028, and release the collateral securing such notes; and
(iv) enter into a new revolving credit facility that, among other
things, would replace GrafTech’s existing revolving commitments
with up to $225 million of new first lien revolving commitments and
extend the maturity date from May 2027 to November 2028, subject to
a springing maturity date based on inside maturities of existing
debt (collectively, the “Transactions”). The consummation of the
Transactions is subject to the satisfaction or waiver of a number
of customary closing conditions. On an as adjusted basis after
giving effect to the Transactions, the Company’s liquidity as of
September 30, 2024 would have increased from $254 million to $529
million.
“The new money debt financing and maturity extension will
provide enhanced liquidity and operational flexibility as we
continue to manage through the near-term industry-wide challenges
facing GrafTech,” said Timothy Flanagan, Chief Executive Officer
and President of the Company. “We look forward to strengthening our
financial foundation and appreciate and are encouraged by the
strong support of our financial partners, which highlights their
confidence in the Company’s future. GrafTech looks forward to
continuing to support its customers with our high-quality products
and technical services.”
Kirkland & Ellis LLP and Evercore are serving as legal and
financial advisors to GrafTech. Davis Polk & Wardwell LLP and
PJT Partners LP are serving as legal and financial advisors to an
ad hoc group of holders of GrafTech’s existing senior notes.
Simpson Thacher & Bartlett LLP is serving as legal advisor to
the revolving lenders.
This communication is not intended to and does not constitute an
offer to sell, buy or subscribe for any securities or otherwise,
nor shall there be any sale, issuance, or transfer of securities in
any jurisdiction in contravention of applicable law. In particular,
this communication is not an offer of securities for sale into the
United States. No offer of securities shall be made in the United
States absent registration under the Securities Act of 1933, as
amended, or pursuant to an exemption from, or in a transaction not
subject to, such registration requirements.
About GrafTech
GrafTech International Ltd. is a leading manufacturer of
high-quality graphite electrode products essential to the
production of electric arc furnace steel and other ferrous and
non-ferrous metals. The Company has a competitive portfolio of
low-cost, ultra-high power graphite electrode manufacturing
facilities, with some of the highest capacity facilities in the
world. GrafTech is the only large-scale graphite electrode producer
that is substantially vertically integrated into petroleum needle
coke, GrafTech’s key raw material for graphite electrode
manufacturing. This unique position provides GrafTech with
competitive advantages in product quality and cost.
Cautionary Note Regarding Forward-Looking Statements
This press release may contain forward-looking statements within
the meaning of the safe harbor provisions of the U.S. Private
Securities Litigation Reform Act of 1995. Forward-looking
statements reflect our current views with respect to, among other
things, the proposed Transactions, short-term and long-term
liquidity, expectations regarding the effect of the Transactions
and plans and objectives of management for future operations and
future economic performance. You can identify these forward-looking
statements by the use of forward-looking words such as “will,”
“may,” “plan,” “estimate,” “project,” “believe,” “anticipate,”
“expect,” “foresee,” “intend,” “should,” “would,” “could,”
“target,” “goal,” “continue to,” “positioned to,” “are confident,”
or the negative versions of those words or other comparable words.
Any forward-looking statements contained in this press release are
based upon our historical performance and on our current plans,
estimates and expectations considering information currently
available to us. The inclusion of this forward-looking information
should not be regarded as a representation by us that the future
plans, estimates, or expectations contemplated by us will be
achieved. Our expectations and targets are not predictions of
actual performance and historically our performance has deviated,
often significantly, from our expectations and targets. These
forward-looking statements are subject to various risks and
uncertainties and assumptions relating to our operations, financial
results, financial condition, business, prospects, growth strategy
and liquidity. Accordingly, there are or will be important factors
that could cause our actual results to differ materially from those
indicated in these statements. We believe that these factors
include, but are not limited to: our dependence on the global steel
industry generally and the electric arc furnace steel industry in
particular; the cyclical nature of our business and the selling
prices of our products, which may continue to decline in the
future, and may lead to prolonged periods of reduced profitability
and net losses or adversely impact liquidity; the sensitivity of
our business and operating results to economic conditions,
including any recession, and the possibility others may not be able
to fulfill their obligations to us in a timely fashion or at all;
the possibility that we may be unable to implement our business
strategies in an effective manner; the possibility that global
graphite electrode overcapacity may adversely affect graphite
electrode prices; the competitiveness of the graphite electrode
industry; our dependence on the supply of raw materials, including
decant oil and petroleum needle coke, and disruptions in supply
chains for these materials; our primary reliance on one facility in
Monterrey, Mexico for the manufacturing of connecting pins; the
cost of electric power and natural gas, particularly in Europe; our
manufacturing operations are subject to hazards; the legal,
compliance, economic, social and political risks associated with
our substantial operations in multiple countries; the possibility
that fluctuation of foreign currency exchange rates could
materially harm our financial results; the possibility that our
results of operations could further deteriorate if our
manufacturing operations were substantially disrupted for an
extended period, including as a result of equipment failure,
climate change, regulatory issues, natural disasters, public health
crises, such as a global pandemic, political crises or other
catastrophic events; the risks and uncertainties associated with
litigation, arbitration, and like disputes, including disputes
related to contractual commitments; our dependence on third parties
for certain construction, maintenance, engineering, transportation,
warehousing and logistics services; the possibility that we are
subject to information technology systems failures, cybersecurity
attacks, network disruptions and breaches of data security; the
possibility that we are unable to recruit or retain key management
and plant operating personnel or successfully negotiate with the
representatives of our employees, including labor unions; the
sensitivity of long-lived assets on our balance sheet to changes in
the market; our dependence on protecting our intellectual property
and the possibility that third parties may claim that our products
or processes infringe their intellectual property rights; the
impact of inflation and our ability to mitigate the effect on our
costs; the impact of macroeconomic and geopolitical events on our
business, results of operations, financial condition and cash
flows, and the disruptions and inefficiencies in our supply chain
that may occur as a result of such events; the possibility that our
indebtedness could limit our financial and operating activities or
that our cash flows may not be sufficient to service our
indebtedness; past increases in benchmark interest rates and the
fact that any future borrowings may subject us to interest rate
risk; risks and uncertainties associated with our ability to access
the capital and credit markets could adversely affect our results
of operations, cash flows and financial condition; the possibility
that disruptions in the capital and credit markets could adversely
affect our customers and suppliers; the possibility that
restrictive covenants in our financing agreements could restrict or
limit our operations; changes in, or more stringent enforcement of,
health, safety and environmental regulations applicable to our
manufacturing operations and facilities; the possibility that the
cash dividends on our common stock, which are currently suspended,
will remain suspended and we may not pay cash dividends on our
common stock in the future; our ability to continue to meet NYSE
continued listing standards; and the ability to satisfy the
conditions precedent with respect to the new financings.
These factors should not be construed as exhaustive and should
be read in conjunction with the Risk Factors and other cautionary
statements that are included in our most recent Annual Report on
Form 10-K and other filings with the U.S. Securities and Exchange
Commission. Additionally, there can be no assurances that the
Transactions will be successfully consummated as they remain
subject to the satisfaction of certain conditions precedent. The
forward-looking statements made in this press release relate only
to events as of the date on which the statements are made. Except
as required by law, we do not undertake any obligation to publicly
update or review any forward-looking statement, whether as a result
of new information, future developments or otherwise. If one or
more of these or other risks or uncertainties materialize, or if
our underlying assumptions prove to be incorrect, our actual
results may vary materially from what we may have expressed or
implied by these forward-looking statements. We caution that you
should not place undue reliance on any of our forward-looking
statements. You should specifically consider the factors identified
in this press release that could cause actual results to differ
before making an investment decision to purchase our common stock.
Furthermore, new risks and uncertainties arise from time to time,
and it is impossible for us to predict those events or how they may
affect us.
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version on businesswire.com: https://www.businesswire.com/news/home/20241111191242/en/
Michael Dillon 216-676-2000 investor.relations@graftech.com
Grafico Azioni GrafTech (NYSE:EAF)
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Da Ott 2024 a Nov 2024
Grafico Azioni GrafTech (NYSE:EAF)
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