MRC Global Postpones Term Loan Refinancing Following Cornell Capital Lawsuit
April 27 2023 - 4:28PM
MRC Global Inc. (NYSE: MRC) announced today that it has postponed
its current efforts to refinance its Term Loan B, which matures in
September 2024. An affiliate of Cornell Capital LLC, the sole
holder of MRC Global’s Series A 6.50% of Convertible Perpetual
Preferred Stock, filed a lawsuit against MRC Global in the Delaware
Court of Chancery to prevent MRC Global from moving forward with
the previously announced refinancing of its senior secured Term
Loan B.
MRC Global made the following statement:
“MRC Global sought to
refinance its Term Loan B long before its maturity to take
advantage of relatively favorable market conditions. Cornell
Capital’s lawsuit seeks to prevent this refinancing by claiming
that Cornell Capital has a right to consent to the terms of the
refinancing transaction. Although we do not believe this is the
case, the lawsuit has complicated the execution of the refinancing
on favorable terms. Therefore, we have determined to postpone the
present refinancing efforts before their conclusion.
Even if MRC Global
does not enter into a refinancing transaction in the future, MRC
Global is confident that it could repay the Term Loan debt
utilizing its asset-based lending (ABL) facility and cash generated
from its operations. As of December 31, 2022, the outstanding
balance on the Term Loan B was $295 million; and the company had
availability under the ABL facility (which matures in September
2026) of $606 million, yielding total liquidity, including cash on
hand, of $638 million. In addition, the company expects to generate
$120 million in cash from operations during 2023, further improving
its liquidity position. MRC Global’s Term Loan B does not mature
until September 2024, providing the company with sufficient time to
address the balance.”
Contact:Monica BroughtonVP, Investor Relations
& TreasuryMRC Global
Inc.Monica.Broughton@mrcglobal.com832-308-2847
About MRC Global Inc.
Headquartered in Houston, Texas, MRC Global
(NYSE: MRC) is the leading global distributor of pipe,
valves, fittings (PVF) and other infrastructure products
and services to diversified end-markets including the gas
utilities, downstream, industrial and energy transition, and
Production and Transmission sectors. With over 100 years of
experience, MRC Global has provided customers with innovative
supply chain solutions, technical product expertise and a robust
digital platform from a worldwide network of 212 locations
including valve and engineering centers. The company’s unmatched
quality assurance program offers over 250,000 SKUs from over 9,000
suppliers, simplifying the supply chain for
approximately 10,000 customers. Find out more at
www.mrcglobal.com
This news release contains forward-looking
statements within the meaning of Section 27A of the Securities Act
and Section 21E of the Exchange Act. Words such as “is confident”,
“believes,” “will,” “would,” and similar expressions are intended
to identify forward-looking statements.
Statements about the company’s expectations
regarding its refinancing or repayment of its senior secured Term
Loan B, Cornell Capital’s lawsuit, the company’s expectation
of having sufficient sources of funds discharge its Term Loan B and
the company’s expectations regarding its 2023 cash flow from
operations are not guarantees of future performance. These
statements are based on management’s expectations that involve a
number of business and legal risks and uncertainties, any of which
could cause actual results to differ materially from those
expressed in or implied by the forward-looking statements. These
statements involve known and unknown risks, uncertainties and other
factors, most of which are difficult to predict and many of which
are beyond MRC Global’s control, including the factors described in
the company’s SEC filings that may cause the company’s actual
results and performance to be materially different from any future
results or performance expressed or implied by these
forward-looking statements.
These risks and uncertainties include (among
others) the risk and uncertainty of litigation and risk of adverse
outcomes in connection therewith; decreases in capital and other
expenditure levels in the industries that the company serves; U.S.
and international general economic conditions; geopolitical events;
decreases in oil and natural gas prices; unexpected supply
shortages; loss of third-party transportation providers; cost
increases by the company’s suppliers and transportation providers;
increases in steel prices, which the company may be unable to pass
along to its customers which could significantly lower the
company’s profit; the company’s lack of long-term contracts with
most of its suppliers; suppliers’ price reductions of products that
the company sells, which could cause the value of its inventory to
decline; decreases in steel prices, which could significantly lower
the company’s profit; a decline in demand for certain of the
products the company distributes if tariffs and duties on these
products are imposed or lifted; holding more inventory than can be
sold in a commercial time frame; significant substitution of
renewables and low-carbon fuels for oil and gas, impacting demand
for the company’s products; risks related to adverse weather events
or natural disasters; environmental, health and safety laws and
regulations and the interpretation or implementation thereof;
changes in the company’s customer and product mix; the risk that
manufacturers of the products that the company distributes will
sell a substantial amount of goods directly to end users in the
industry sectors that the company serves; failure to operate the
company’s business in an efficient or optimized manner; the
company’s ability to compete successfully with other companies; the
company’s lack of long-term contracts with many of its customers
and the company’s lack of contracts with customers that require
minimum purchase volumes; inability to attract and retain employees
or the potential loss of key personnel; adverse health events, such
as a pandemic; interruption in the proper functioning of the
company’s information systems; the occurrence of cybersecurity
incidents; risks related to the company’s customers’
creditworthiness; the success of acquisition strategies; the
potential adverse effects associated with integrating acquisitions
and whether these acquisitions will yield their intended benefits;
impairment of the company’s goodwill or other intangible assets;
adverse changes in political or economic conditions in the
countries in which the company operates; the company’s significant
indebtedness; the dependence on the company’s subsidiaries for cash
to meet parent company obligations; changes in the company’s credit
profile; potential inability to obtain necessary capital; the
sufficiency of the company’s insurance policies to cover losses,
including liabilities arising from litigation; product liability
claims against the company; pending or future asbestos-related
claims against the company; exposure to U.S. and international laws
and regulations, regulating corruption, limiting imports or exports
or imposing economic sanctions; risks relating to ongoing
evaluations of internal controls required by Section 404 of the
Sarbanes-Oxley Act; and risks related to changing laws and
regulations including trade policies and tariffs.
For a discussion of key risk factors, please see
the risk factors disclosed in the company’s SEC filings, which are
available on the SEC’s website at www.sec.gov and on the company’s
website, www.mrcglobal.com. MRC Global’s filings and other
important information are also available on the "Investors" page of
the company’s website at www.mrcglobal.com.
Undue reliance should not be placed on the
company’s forward-looking statements. Although forward-looking
statements reflect the company’s good faith beliefs, reliance
should not be placed on forward-looking statements because they
involve known and unknown risks, uncertainties and other factors,
which may cause the company’s actual results, performance or
achievements or future events to differ materially from anticipated
future results, performance or achievements or future events
expressed or implied by such forward-looking statements. The
company undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future events, changed circumstances or otherwise, except to the
extent required by law.
MRC Global (NYSE:MRC)
Historical Stock Chart
From May 2024 to Jun 2024
MRC Global (NYSE:MRC)
Historical Stock Chart
From Jun 2023 to Jun 2024