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GSE now under Chapter 11 bankruptcy protection

May 5th, 2014 / By: / Industry News

Company’s international affiliates not affected

GSE Environmental Inc. placed its North American operations under Chapter 11 bankruptcy protection on Sunday, May 4, with a plan to hand them off to secured lenders, Reuters and The Wall Street Journal reported Monday morning.

A new GSE manufacturing facility in China and GSE’s “other international affiliates or their debt” won’t be affected by the bankruptcy filing, according to papers filed in U.S.Bankruptcy Court in Wilmington, Del., on Sunday. GSE maintains sales offices throughout the world and manufacturing facilities in the U.S., Chile, Germany, Thailand, China, and Egypt.

GSE manufactures geosynthetic lining materials for waste management, containment, and mining applications. It listed assets and liabilities of between $100 million and $500 million, according to the court filing.

GSE said it received up to $45 million in debtor-in-possession financing, and plans to use that money to repay debt and for general corporate purposes. In its May 5 press release, GSE said: “The DIP financing will provide adequate funding to meet customer, vendor, employee, and other stakeholder commitments for the duration of the restructuring process.”

Houston-based GSE was delisted from the New York Stock Exchange in March after it failed to maintain listing requirements.

The company later announced “timeline changes for company sale.”

In its most recent third-quarter results in November, GSE reported a loss of $35.8 million, or $1.77 per share, compared with a profit of $5.2 million, or 26 cents per share, a year earlier.

The case is in RE: GSE Environmental Inc; U.S. Bankruptcy Court, District of Delaware, No: 14-11126.

In its May 5 press release, GSE said it had reached “consensual agreement with lenders to restructure its balance sheet and strengthen [its] financial position … normal business operations to continue with ample liquidity and no interruption in business.”
The GSE press release said that “In conjunction with the Chapter 11 filing, GSE entered into a restructuring support agreement with lenders who hold 100% of the company’s first lien debt. In this agreement, the lenders committed to support a restructuring transaction that will eliminate more than $172 million in debt from GSE Environmental’s balance sheet.”

The release noted that GSE Environmental’s non‐U.S. subsidiaries are not included in the U.S. Chapter 11 filings and will continue to operate in the ordinary course of business without interruption.

GSE is represented by Kirkland & Ellis LLP, Alvarez & Marsal North America LLC, and Moelis & Co. The first lien lenders are represented by Wachtell, Lipton, Rosen & Katz.

For more information about this announcement from GSE, contact GSE Environmental at (281)230-5843 or recapitalization@gseworld.com. Documents relating to the company’s filing are at: www.gseworld.com

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