Warrior Met Coal, Inc 8-K, filed Nov 18, 2021
Warrior Met Coal, Inc. (HCC)
About this 8-K
Warrior Met Coal, Inc filed this 8-K on November 18, 2021.
Items reported
- Item 7.01: Regulation FD disclosure
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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| Item 7.01. | Regulation FD Disclosure. |
Redemption of Existing Notes
On November 18, 2021, in connection with the commencement of a private offering (the “Proposed Offering”) of $350.0 million aggregate principal amount of senior secured notes due 2028 (the “Notes”) of Warrior Met Coal, Inc. (the “Company”), the Company delivered to the holders of its 8.00% senior secured notes due 2024 (the “Existing Notes”) (with a copy to Wilmington Trust, National Association, as trustee (the “Existing Notes Trustee”) for the Existing Notes) a conditional notice of optional full redemption (the “Conditional Redemption Notice”) with respect to all of the outstanding Existing Notes (the “Existing Notes Redemption”). The Company’s obligation to redeem the Existing Notes is conditioned upon the successful completion of the Proposed Offering (the “Condition Precedent”). In the Existing Notes Redemption, the Company will redeem all the Existing Notes at a cash redemption price equal to 102.000% of the principal amount thereof plus accrued and unpaid interest thereon to the scheduled redemption date of December 18, 2021 (the “Redemption Date”) (subject to satisfaction of the conditions set forth in the Conditional Redemption Notice) (the “Redemption Price”). On the closing date of the Proposed Offering, the Company intends to use all of the net proceeds from the Proposed Offering, together with cash on hand, to satisfy and discharge the indenture governing the Existing Notes (the “Existing Notes Indenture”) by making an irrevocable deposit with the Existing Notes Trustee of funds sufficient to pay the Redemption Price plus accrued and unpaid interest for the Existing Notes on the scheduled Redemption Date (approximately $353.9 million) plus any other amounts due under the Existing Notes Indenture. Following the redemption, no Existing Notes will remain outstanding.
If the Condition Precedent has been satisfied, on and after the Redemption Date, interest on the Existing Notes will cease to accrue in accordance with the Existing Notes Indenture, unless the Company defaults in paying the Redemption Price, and the only remaining right of holders of the Existing Notes will be to receive payment of the Redemption Price.
This Current Report on Form 8-K does not constitute a notice of redemption under the Existing Notes Indenture and is qualified in its entirety by reference to the Conditional Redemption Notice.
Amendment and Restatement of ABL Facility
Concurrently with the closing of the Proposed Offering, the Company expects to enter into, and has obtained commitments regarding, the Second Amended and Restated Asset-Based Revolving Credit Agreement (the “Second Amended and Restated Credit Agreement”), by and among the Company and certain of its subsidiaries, as borrowers, the guarantors party thereto, the lenders from time to time party thereto and Citibank, N.A. as administrative agent, which will amend and restate in its entirety the existing Amended and Restated Asset-Based Revolving Credit Agreement (the “ABL Facility”) and, among other things (i) extend the maturity date of the ABL Facility to the fifth anniversary date of the closing of the Proposed Offering; (ii) change the calculation of the interest rate payable on borrowings from being based on London Interbank Offered Rate to be based on Secured Overnight Financing Rate, with corresponding changes to the applicable interest rate margins with respect to such borrowings, (iii) amend certain definitions related to the calculation of the borrowing base; (iv) increase the commitments that may be used to issue letters of credit to $65.0 million; and (v) amend certain baskets contained in the covenants to conform to the baskets contained in the indenture that will govern the Notes. The Second Amended and Restated Credit Agreement will allow the Company to borrow up to $132 million through October 14, 2023, and thereafter up to $116 million through November 2026, subject to meeting borrowing base and other conditions therein. The closing of the Proposed Offering is conditioned upon the consummation of the Second Amended and Restated Credit Agreement.
Preliminary Offering Circular Disclosure
The Company is furnishing herewith the following information included in the confidential preliminary offering circular, dated November 18, 2021, relating to the Proposed Offering:
As of September 30, 2021, the Company had approximately $470.2 million available to make Restricted Payments using the Company’s Cumulative Credit basket under the Existing Notes Indenture, subject to making a Restricted Payment Offer and compliance with the Fixed Charge Coverage Ratio test of at least 2.00 to 1.00 and no default conditions as set forth in the Existing Notes Indenture.
As of November 18, 2021, the Company had approximately $58.8 million of remaining unused Declined Amounts (as defined in the Existing Notes Indenture) available to make Restricted Payments or for any other purpose not otherwise prohibited under the Existing Notes Indenture, as a result of the making of the Restricted Payment Offer (as defined in the Existing Notes Indenture) that was consummated on March 22, 2019.
The information being furnished in this Item 7.01 shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be incorporated by reference into a filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
| Item 8.01. | Other Events |
On November 18, 2021, the Company issued a press release announcing that it commenced the Proposed Offering. The Company expects to use the net proceeds of the offering of the Notes, together with cash on hand, to fund the Existing Notes Redemption, including payment of the redemption premium in connection with such redemption.
A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
This Current Report on Form 8-K is neither an offer to sell nor a solicitation of an offer to buy any of the Notes in the Proposed Offering and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
Forward-looking Statements
This Current Report on Form 8-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements, other than statements of historical facts, included in this Current Report on Form 8-K that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “project,” “target,” “foresee,” “should,” “would,” “could,” “potential,” or other similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements represent management’s good faith
expectations, projections, guidance or beliefs concerning future events, and it is possible that the results described in this Current Report on Form 8-K will not be achieved. Specifically, the Company cannot assure you that the Proposed Offering, the Existing Notes Redemption and the execution of the Second Amended and Restated Credit Agreement described above will be consummated on the terms the Company currently contemplates, if at all. Information concerning these and other factors can be found in the Company’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the year ended December 31, 2020 and Form 10-Q for the quarterly period ended September 30, 2021 and other reports filed from time to time with the SEC.
Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for the Company to predict all such factors.
| Item 9.01. | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit |
Exhibit Description | |
| 99.1 | Press Release, dated November 18, 2021 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Warrior Met Coal, Inc. | ||||||
| Date: November 18, 2021 | By: | /s/ Dale W. Boyles | ||||
| Dale W. Boyles | ||||||
| Chief Financial Officer | ||||||
Exhibit 99.1
Warrior Met Coal Launches Proposed $350 Million Offering of Senior Secured Notes
BROOKWOOD, AL — November 18, 2021— Warrior Met Coal, Inc. (NYSE: HCC) (“Warrior” or the “Company”) today announced that it proposes to offer, subject to market conditions and other factors, $350 million in aggregate principal amount of senior secured notes due 2028 (the “Notes”) in a private offering that is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). Warrior expects to use the net proceeds of the offering of the Notes, together with cash on hand, to fund the redemption of all of its outstanding 8.00% senior secured notes due 2024 (the “Existing Notes”), including payment of the redemption premium in connection with such redemption.
The Notes will be initially guaranteed, jointly and severally, by each of Warrior’s direct and indirect wholly-owned domestic restricted subsidiaries that are borrowers or guarantors under Warrior’s Asset-Based Revolving Credit Agreement Facility as in effect on the issuance date of the Notes (the “ABL Facility”).
The Notes will be offered and sold to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act.
The Notes have not been and will not be registered under the Securities Act or applicable state securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.
This press release does not constitute a notice of redemption under the indenture governing the Existing Notes and is neither an offer to sell nor a solicitation of an offer to buy any of the Notes or any other securities and shall not constitute an offer, solicitation or sale in any state or jurisdiction in which such offer, solicitation or sale is unlawful.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. The words “believe,” “expect,” “anticipate,” “plan,” “intend,” “estimate,” “project,” “target,” “foresee,” “should,” “would,” “could,” “potential” or other similar expressions are intended to identify forward-looking statements. However, the absence of these words does not mean that the statements are not forward-looking. These forward-looking statements represent management’s good faith expectations, projections, guidance or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. Specifically, the Company cannot assure you that the proposed transactions described above, including the proposed offering of the Notes and the redemption of the Existing Notes, will be consummated on the terms the Company currently contemplates, if at all. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of the Company’s control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, without limitation, fluctuations or changes in the pricing or demand for the Company’s coal (or met coal generally) by the global steel industry; the impact of COVID-19 on its business and that of its customers, including the risk of a decline in demand for the Company’s met coal due to the impact of COVID-19 on steel manufacturers, the inability of the Company to effectively operate its mines and the resulting decrease in production, the inability of the Company to ship its products to customers in the case of a partial or complete shut-down of the Port of Mobile; federal and state tax legislation; changes in interpretation or assumptions and/or updated regulatory guidance regarding the Tax Cuts and Jobs Act of 2017;
legislation and regulations relating to the Clean Air Act and other environmental initiatives; regulatory requirements associated with federal, state and local regulatory agencies, and such agencies’ authority to order temporary or permanent closure of the Company’s mines; operational, logistical, geological, permit, license, labor and weather-related factors, including equipment, permitting, site access, operational risks and new technologies related to mining and labor strikes or slowdowns; the timing and impact of planned longwall moves; the Company’s obligations surrounding reclamation and mine closure; inaccuracies in the Company’s estimates of its met coal reserves; any projections or estimates regarding Blue Creek, including the expected returns from this project, if any, and the ability of Blue Creek to enhance the Company’s portfolio of assets, the Company’s expectations regarding its future tax rate as well as its ability to effectively utilize its NOLs to reduce or eliminate its cash taxes; the Company’s ability to develop Blue Creek; the Company’s ability to develop or acquire met coal reserves in an economically feasible manner; significant cost increases and fluctuations, and delay in the delivery of raw materials, mining equipment and purchased components; competition and foreign currency fluctuations; fluctuations in the amount of cash the Company generates from operations, including cash necessary to pay any special or quarterly dividend; the Company’s ability to comply with covenants in its ABL Facility or indenture relating to its senior secured notes; integration of businesses that the Company may acquire in the future; adequate liquidity and the cost, availability and access to capital and financial markets; failure to obtain or renew surety bonds on acceptable terms, which could affect the Company’s ability to secure reclamation and coal lease obligations; costs associated with litigation, including claims not yet asserted; and other factors described in the Company’s Form 10-K for the year ended December 31, 2020, Form 10-Q for the quarter ended September 30, 2021 and other reports filed from time to time with the Securities and Exchange Commission (the “SEC”), which could cause the Company’s actual results to differ materially from those contained in any forward-looking statement. The Company’s filings with the SEC are available on its website at www.warriormetcoal.com and on the SEC’s website at www.sec.gov.
Any forward-looking statement speaks only as of the date on which it is made, and, except as required by law, the Company does not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time, and it is not possible for the Company to predict all such factors.
Contacts
For Investors:
Dale W. Boyles, 205-554-6129
dale.boyles@warriormetcoal.com
For Media:
D’Andre Wright, 205-554-6131
dandre.wright@warriormetcoal.com