Item 1.03. Bankruptcy or Receivership.
On April 9, 2017 (the “Petition Date”), Ciber, Inc. (the “Company”) and its subsidiaries Ciber International LLC and Ciber Consulting, Inc. (together with the Company, the “Debtors”) filed voluntary petitions seeking relief under Chapter 11 of the United States Bankruptcy Code (the “Bankruptcy Code”) in the United States Bankruptcy Court in the District of Delaware (the “Bankruptcy Court”). The Chapter 11 cases are expected to be administered under the caption “In re Ciber, Inc.,
et al.
”, Case No. 17-10772 (the “Chapter 11 Cases”). The Debtors continue to operate their businesses and manage their properties as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
In connection with the Chapter 11 Cases, the Debtors filed a motion seeking Bankruptcy Court approval of debtor-in-possession financing on the terms set forth in a form of Debtor-in-Possession (“DIP”) Credit Agreement (the “DIP Credit Agreement”), with respect to the Company and Wells Fargo Bank NA (“Wells Fargo”), as lender and administrative agent for the lenders that will be party to the DIP Credit Agreement (collectively, the “DIP Lenders”). Wells Fargo is the lender under the Company’s Asset Based Lending Facility, dated as of May 7, 2012 and as amended from time to time (the “Credit Facility”). The Company and its subsidiaries Ciber International LLC and Ciber Consulting, Inc. will be borrowers under the DIP Credit Agreement.
The DIP Credit Agreement provides for a secured super-priority debtor-in-possession revolving credit facility of up to $41,000,000 (the “DIP Financing”). The DIP Financing will be used for (i) general working capital and operational expenses, (ii) administration of the Chapter 11 Cases (in each case of (i) and (ii), in accordance with the cash flow budget prepared by the Debtors and approved by the DIP Lenders), and (iii) costs, expenses, closing payments, and all other payment amounts contemplated in the DIP Credit Agreement. The DIP Financing is subject to Bankruptcy Court approval, and the Debtors have filed a motion with the Bankruptcy Court seeking that approval.
The Debtors will begin immediately a process, called a “363 Sale Process”, to solicit bids and conduct a sale to one or more third parties of substantially all of the assets of the Debtors under Section 363 of the Bankruptcy Code. On April 10, 2017, the Company entered into a “stalking horse” Asset Purchase Agreement (the “Purchase Agreement”) with Capgemini America, Inc. (the “Buyer”), pursuant to which the Buyer agreed to purchase substantially all of the assets of the Company in North America and India (such assets, the “Assets,” and such transaction, the “Asset Sale”). No stalking horse bidder is in place for the remainder of the Company’s assets.
The Company has sought the Bankruptcy Court’s approval of the Buyer as the “stalking horse” bidder of the Assets. If approved by the Bankruptcy Court as the stalking horse bidder, the Buyer’s offer to purchase the Assets, as set forth in the Purchase Agreement, would be the standard by which any other bids to purchase the Assets would be evaluated.
The Purchase Agreement provides for consideration to be paid by the Buyer in the form of assumption of specified liabilities and payment in cash to the Company of $50,000,000. The transaction is subject to certain closing conditions as specified in the Purchase Agreement. The Purchase Agreement also provides for expense reimbursement and a break-up fee, in each case payable to the Buyer upon the occurrence of certain events.
The foregoing description of the DIP Credit Agreement is qualified in its entirety by reference to the DIP Credit Agreement filed with the Bankruptcy Court.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Purchase Agreement filed as Exhibit 2.1.