Real Alloy Holding, Inc. announced that the Company and the ad hoc group comprised of certain Real Alloy noteholders led by funds and accounts managed by DDJ Capital Management have reached an agreement in principal with the Official Committee of Unsecured Creditors under which the Committee will support the sale of Real Alloy to the noteholder group pursuant to the terms and conditions of an asset purchase agreement filed with the Bankruptcy Court on March 8, 2018. Under the asset purchase agreement, the noteholder group has agreed to acquire substantially all of Real Alloy’s US and international operations for an estimated total purchase consideration of approximately $364 million, plus the assumption of certain liabilities. The noteholder group’s bid will remain subject to higher and better bids, as contemplated by the bid procedures approved by the Bankruptcy Court.

 As part of reaching an agreement with the Committee, the asset purchase agreement provides for the assumption by the buyer of certain priority and unsecured claims of the estate. Specifically, the purchaser has committed to assume up to $18.6 million in liabilities on account of these claims. Under the asset purchase agreement, 503(b)(9) claimants may receive as much as 100% on account of their claims as an upfront payment at closing in exchange for terms including negotiated credit limits, volume and pricing. Vendors holding general unsecured claims may also receive recoveries on their claims, depending upon credit and other commercial terms offered.

Under the terms of the “stalking horse bid”, the Company is expected to see its secured debt obligations reduced by approximately $200 million, which will provide the Company with a strong balance sheet and ample liquidity post Chapter 11 emergence.

During this process, Real Alloy will continue its operations uninterrupted in the ordinary course of business, and will meet day-to-day obligations to its customers, suppliers of goods and services, and employees.

Terry Hogan, President of Real Alloy, stated, “We remain on track to complete the sale process as planned by the end of April and are pleased that Real Alloy’s secured and unsecured creditors have been able to reach a mutually agreeable settlement at this time. This paves the way forward for the Company. As we work as expeditiously as possible toward closing, our day-to-day operations will move forward as usual, and we look forward to providing further updates in the coming weeks.”