Thu 06/01/2023 11:26 AM
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The Incora debtors have filed the first day declaration of Incora CFO Raymond Carney in support of their chapter 11 filings. Consistent with the company’s press release announcing the filing, Carney says the company has obtained a $300 million DIP facility from a group of its 2026 first lien noteholders, having reached an agreement yesterday, Wednesday, May 31. 

Carney says that the company’s March 2022 uptier exchange transaction, which provided the company with $224 million of “much-needed cash,” “has not been enough to overcome a confluence of unforeseeable events, all beyond Incora’s control,” including “significant disruption in the global supply chain, critical labor shortages, and the extended closure of the Chinese markets following COVID-19, which further delayed the expected rebound in the aerospace industry.”

Carney adds that lawsuits by nonparticipating bondholders challenging the uptier transaction “have caused yet another drain on Incora’s financial resources (including on account of Incora’s indemnification of the parties that participated in the 2022 Transaction) and distraction for its management team and key employees at a time when focus on operations and reorganization could not be more critical.”

“As a result, Incora is unable to meet its near-term obligations, including interest payments on its notes that became due on May 15, 2023,” says Carney.

Carney says the company intends to use chapter 11 “to repair its capital structure and address targeted operational issues … including by bringing its unprofitable customer contracts and other burdensome contractual arrangements in line with current economic and commercial reality.” Carney emphasizes that demand for the company’s services “remains strong” and that “Incora is poised for growth.” “It is my every expectation that Incora will emerge from the Chapter 11 Cases a healthier and more nimble company that can execute on its strategic initiatives, retain a talented workforce, and continue to provide its global customer base with the reliable and innovative supply chain solutions that have made Incora a trusted partner and market leader,” says Carney.

The docket is available on the Reorg site HERE.
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