Fusion Enters into Forbearance Agreements with Its First Lien Lenders
Fusion, a leading provider of cloud services, announced that it has entered into a forbearance agreement (the “Forbearance Agreement”) with certain of its first lien lenders holding in excess of 70% of the Company’s first lien term l**** and 100% of the Company’s revolving lenders.
Under the terms of the Forbearance Agreement, these first lien lenders have agreed not to exercise the remedies available to them related to Fusion’s decision not to make its scheduled principal payments due on April 1 and 2, 2019 and certain other defaults under the Company’s credit agreement. The Forbearance Agreement extends until April 29, 2019 unless certain specified events occur. Further, the Company’s second lien lenders are not permitted to exercise rights or remedies against the Company for 150 days from the date of notice of default under the terms of an inter-creditor agreement.
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As previously disclosed, Fusion is continuing to operate its business as usual and is providing its customers and partners with outstanding service while it completes a review of various strategic options to preserve the value of its business and solidify its financial footing. The Forbearance Agreement is specifically designed to allow the Company, its first and second lien lenders, and their respective legal and financial advisors to continue their ongoing active discussions to evaluate these various alternatives for the Company’s capital structure and financial position. The Company continues to pay suppliers and is funding current operations on an ongoing basis.
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Fusion will update stakeholders further when the Company’s Board of Directors has approved a specific alternative or transaction or otherwise determined that further disclosure is appropriate or legally required.
The Company has retained FTI Consulting and PJT Partners, Inc. as its financial advisors and Weil, Gotshal & Manges LLP as its legal advisor to assist the Company in analyzing and evaluating its various alternatives with respect to its capital structure.
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