LINCOLN, Neb., August 31, 2016—Nebraska Book Holdings, Inc.* (OTC Pink: NEEB) (the “Company”) today announced that it has extended its offer to exchange (the “Exchange Offer”) 2.0 percent Convertible Senior PIK Notes due 2026 (the “New Senior Notes”) for any and all outstanding 15.0 percent Senior Secured Notes due 2016 (the “Existing Notes”).
Extension of Exchange Offer
The Exchange Offer was previously scheduled to expire at 12:00 midnight, New York City time, on August 30, 2016, unless extended. As of the close of business on August 30, 2016, approximately $83.4 million in principal amount, or 75.8 percent, of the Existing Notes have been validly tendered for exchange for New Senior Notes in the Exchange Offer and not validly withdrawn. The new expiration date for the Exchange Offer is 12:00 midnight, New York City time, on September 16, 2016, unless further extended by the Company (the “Expiration Time”). At the Expiration Time, the Company will accept all Existing Notes tendered and not withdrawn, provided that the remaining Exchange Offer conditions have been satisfied or waived and the Expiration Time has not been further extended. The amount of New Senior Notes to be issued will be determined based upon the amount of Existing Notes tendered and accepted in the Exchange Offer and the amount of accrued and unpaid interest due at the completion of the Exchange Offer. Assuming all the Existing Notes are exchanged as of September 19, 2016, a maximum of approximately $132.2 million in New Senior Notes would be issued.
Amendment to Existing Notes Forbearance Agreement
The Company is also announcing that it has entered into a fourth amendment to the forbearance agreement (such agreement, as amended by the first, second and third amendments, the “Existing Notes Forbearance Agreement”) with major noteholders, including MAST Capital Management, LLC on behalf of certain funds managed by it, and other noteholders (together, the “Forbearing Noteholders”), who collectively hold in excess of 75.0 percent of the Existing Notes. Pursuant to the fourth amendment to the Existing Notes Forbearance Agreement, each of the Forbearing Noteholders will forbear from exercising certain rights and remedies under the indenture (the “Indenture”) governing the Existing Notes relating to certain events of default, including the failure to pay principal, premium and interest that is currently due on the Existing Notes, or initiating or joining any lawsuits or complaints relating to the Indenture, until the earlier of 5:00 p.m. New York City time on September 19, 2016, or the occurrence of certain events of default specified in the Existing Notes Forbearance Agreement. The Existing Notes Forbearance Agreement, as amended, is intended to provide the Company a further opportunity to negotiate a restructuring of its indebtedness represented by the Existing Notes. The Company is actively negotiating with the Forbearing Noteholders the terms of potential debt restructuring arrangements with the objective of reaching an agreement by the end of the forbearance period.
Amendment to ABL Credit Facility Forbearance Agreement
As previously disclosed, the Company has entered into a forbearance agreement with the agent and required lenders under its ABL credit facility pursuant to which they agreed not to exercise any of their rights or remedies with respect to specified defaults until August 31, 2016. This forbearance agreement has been amended to extend the termination date of the forbearance period through 11:59 p.m. New York City time on September 19, 2016.
Conditions to the Exchange Offer
The closing of the Exchange Offer is subject to customary conditions, which the Company may assert or waive. These conditions include: (1) 90.0 percent of the outstanding aggregate principal amount of the Existing Notes is validly tendered and not withdrawn; (only Existing Notes that have not been reacquired by the Company will be counted in determining the amount of Existing Notes outstanding for purposes of determining the satisfaction of the minimum tender condition); (2) finalizing definitive documentation for a new senior term loan with terms and conditions reasonably acceptable to the Company and MAST, as lender; (3) finalizing definitive documentation for a participation agreement with certain holders of the Existing Notes; and (4) other customary conditions described in the Company’s Offering Memorandum.
The complete terms and conditions of the Exchange Offer are described in the Company’s Offering Memorandum dated March 18, 2016, as amended by the Company’s press release dated April 15, 2016, the Company’s press release dated April 29, 2016, the Company’s press release dated May 31, 2016, the Company’s press release dated June 30, 2016, the Company’s press release dated July 29, 2016, this press release, the Letter of Transmittal and Eligibility Packet that were previously distributed to holders of the Existing Notes, and the audited consolidated financial statements of the Company as of March 31, 2015, and March 31, 2016, and for the three years ended March 31, 2016, and its unaudited financial statements as of June 30, 2016, and for the quarters ended June 30, 2015, and June 30, 2016, all of which are incorporated herein by reference and which may be obtained on the Company’s website, www.nebook.com, under the “News” and “Financial” tabs.
Agents for the Exchange Offer
The Company has engaged Computershare as the exchange agent and Georgeson LLC as the information agent for the Exchange Offer. Persons with questions regarding the Exchange Offer or who want to obtain additional copies of the Company’s Offering Memorandum, the Letter of Transmittal and the Eligibility Packet should contact Georgeson LLC by telephone at 1-888-206-0860 or by email at email@example.com.
Forward-Looking Information Is Subject to Risk and Uncertainty
This press release contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they do not fully materialize or prove incorrect, could cause the company’s business and results of operations to differ materially from those expressed or implied by such forward-looking statements.
Such forward-looking statements include statements that discuss management’s beliefs and assumptions and can be identified by the use of words such as “will,” “may,” “should,” “expects,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “intends,” “potential,” “continue,” or the negative of such terms, or other comparable terminology. These forward-looking statements speak only as of the date of this press release. The Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.
Additional information regarding forward-looking statements, as well as additional risks and uncertainties that may affect results and could cause results to differ materially from those expressed in such forward-looking statements, is contained in the Risk Factors section of the Company’s Offering Memorandum that was previously distributed to holders of the Existing Notes.
About Nebraska Book Holdings, Inc.
Nebraska Book Holdings, Inc., more commonly known as Nebraska Book Company, began in 1915 as an independent college bookstore and is now a key resources partner to over 2,000 independent college retailers nationwide. With its strategic business services and technology offerings, including localized e-commerce capabilities, back-end system access and support as well as textbook solutions, Nebraska Book Company is devoted to supporting and strengthening independent higher education retailers across the United States. For more information about Nebraska Book Company, visit www.nebook.com. The Company’s website is not part of or being incorporated into the Exchange Offer.*Nebraska Book Holdings, Inc. common stock is not listed, traded or quoted on any U.S. stock exchange but is quoted on the OTC Pink Market under the symbol NEEB.
*Nebraska Book Holdings, Inc. common stock is not listed, traded or quoted on any U.S. stock exchange but is quoted on the OTC Pink Market under the symbol NEEB.