RM Bidder, LLC Adequate Assurance Package

Transcription

1 RM Bidder, LLC Adequate Assurance Package September 2015

2 RM Bidder, LLC Adequate Assurance Package Sale Process Adequate Assurance RM Bidder, LLC/About the Investors Forward-Looking Statements Financial Information 2

3 Sale Process Adequate Assurance On July 30, 2015, Relativity Fashion, LLC and its affiliated debtors and debtors in possession (collectively, the Debtors ) filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court ). The cases are being jointly administrated under case number (MEW). The Honorable Michael E. Wiles is the presiding judge. On July 30, 2015, the Debtors filed the Debtors Motion For (I) An Order (A) Establishing Bid Procedures For the Sale of Substantially All of the Debtors Assets, (B) Approving Stalking Horse APA and Bidding Protections, and (C) Granting Certain Related Relief and (II) an Order (A) Approving the Sale of Substantially All of the Debtors Assets Free and Clear of Liens, Claims, Encumbrances And Other Interests, (B) Approving the Assumption and Assignment of Certain Executory Contracts and Unexpired Leases Related Thereto, and (C) Granting Certain Related Relief [Docket No. 25] (the Motion ). In the Motion, the Debtors requested, among other things, (a) approval of bidding procedures (the Bidding Procedures ) in connection with the sale of all or substantially all of the Debtors assets in one or more lots (the Acquired Assets ), (b) approval of the form and manner of the sale and publication notices, (c) the scheduling of an auction and a hearing to approve the sale(s) of the Acquired Assets, and (d) approval of procedures for determining cure amounts in connection with the assumption and assignment of executory contracts and unexpired leases. On August 9, 2015, RM Bidder, LLC (the Purchaser ) and Relativity Media, LLC, on behalf of itself and its affiliated Debtors, entered into an asset purchase agreement (as amended from time to time, the Purchase Agreement ), pursuant to which Purchaser agreed to acquire certain assets comprising the Debtors motion picture, television, music and sports business divisions (the Business and such assets, the Purchased Assets ). The Purchase Agreement was subsequently amended on August 21, 2015 and August 27, The aggregate consideration for the Purchased Assets will be: (i) the discharge in full of all amounts outstanding and obligations under the debtor-in-possession loan agreement; (ii) the discharge of all amounts outstanding and obligations under Term A Loans and Term A-1 Loans, made pursuant to the Debtors existing term loan agreement; (iii) the discharge of a portion of the principal amount outstanding and obligations under Term B Loans, made pursuant to the Debtors prepetition term loan agreement, if any, such that the aggregate amount of funds discharged under the debtorin-possession loan, the Term A Loans, the Term A-1 Loans and the Term B Loans is equal to $250,000,000; (iv) an amount in cash equal to $3,171,000, allocated solely for the benefit of certain post-release P&A lenders, in exchange for all of the Debtors right, title and interest in the film Beyond the Lights; (v) an amount in cash allocated solely for the benefit of senior lenders sufficient to cause the payment in full of certain senior obligations with respect to the Purchased Assets, if any, under each of the intercreditor agreements (collectively with the amounts set forth in clause (iv), the Cash Bid Amount ); and (vi) assumption of certain assumed liabilities. 3

4 Sale Process Adequate Assurance (cont d) Pursuant to the terms of the bid, the Debtors would be obligated to assume and assign to Purchaser certain executory contracts and unexpired leases. On August 28, 2015, the Bankruptcy Court entered an order approving the Bidding Procedures and related auction process for the selection of the highest or otherwise best bid. The Bidding Procedures detail the process by which the Debtors are authorized to conduct a sale by auction of the Acquired Assets (which may or may not be identical to the Purchased Assets as defined in the Purchase Agreement). Pursuant to the Bidding Procedures, Purchaser is providing the information in this adequate assurance package to the Debtors and counterparties to executory contracts and unexpired leases. The purpose of this presentation is to provide counterparties to executory contracts and lessors under unexpired leases with adequate assurance of the Purchaser s ability to perform its obligations under contracts and leases to be assumed by the Debtors and assigned under the Purchase Agreement. 4

5 RM Bidder, LLC/About the Investors Purchaser was formed on July 29, 2015 as a limited liability company under the laws of the State of Delaware. Purchaser has no operating history and was formed as a special purpose vehicle for purposes of acquiring the Purchased Assets. Upon closing of the transactions contemplated by the Purchase Agreement (the Closing ), the membership interests of Purchaser will be owned by persons who are currently lenders under the Debtors prepetition term loan agreement. It is anticipated that, at Closing, a majority of the membership interests will be owned by affiliates of Anchorage Capital Group, L.L.C., Falcon Investment Advisors, LLC, and Luxor Capital Group, LP. Anchorage Capital Master Offshore, Ltd. ( ACMO ) is managed by Anchorage Capital Group, L.L.C., a New York based registered investment adviser founded in 2003 that currently manages approximately $16 billion in global assets with particular focus on defaulted and leveraged issuers and investment grade securities. ACMO REL Holdings, L.L.C. is a subsidiary of ACMO. Formed in July 2000, Falcon Investment Advisors, LLC ( Falcon ) is a private equity firm that invests subordinated debt and equity capital in leading middle market companies and manages over $1.8 billion of capital. Falcon is a registered investment advisor based in Boston, MA. Luxor Capital Group, LP ( Luxor ) is a registered investment advisory firm located in New York and founded in Luxor acts as the investment manager to a number of private investment funds and as of August 1, 2015 had approximately $5.8 billion in assets under management. As of immediately prior to the Closing, Purchaser will be capitalized with between $60 million and $80 million in cash, which amount, in conjunction with cash proceeds expected to be available from incremental financing of the Purchased Assets, shall be sufficient to (i) satisfy assumed liabilities that are to paid at the Closing; (ii) satisfy certain other obligations to be paid at or after the Closing in connection with the operation of the Business, including amounts owing to certain key vendors and counterparties; and (iii) continue the operations of the Business, including in connection with the contracts and leases to be assumed and assigned under the Purchase Agreement, consistent with the objectives the Purchaser. 5

6 Forward-Looking Statements This presentation contains forward-looking statements about Purchaser. These forward-looking statements are based on confidential data received from the Debtors. As with any projection or forecast, they are inherently susceptible to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied in these forward-looking statements. Important factors that could cause Purchaser s actual results to differ materially from those in these forwardlooking statements include government regulation, economic, strategic, political, and social conditions. Any forward-looking statements made herein speak only as of the date on which they are made; Purchaser is under no obligation to, and expressly disclaims any obligation to, update or alter these forward-looking statements, whether as a result of new information, subsequent events or otherwise. 6

7 Financial Information NewCo Adequate Assurance Analysis ($mm) Value Low High Notes Stalking Horse Bid Value $ 250 $ 250 Rights Offering (cash) Rights offering amount to be determined based on finalized business plan capital requirements Implied Enterprise Value $ 310 $ 330 Estimated Obligations Cures & Assumed Liabilities $ (90) $ (65) Includes estimated amounts for P&R, debt on acquired films, contract cures, etc. Implied Value in Excess of Obligations $ 220 $ 265 Note: Given significant unencumbered asset value, the Company has the ability to obtain additional financing. For reference, as of July 10, 2015 the Ultimates facility in place at that time reflected a borrowing base of approximately $68mm. 7