|FORTERRA, INC. filed this Form 10-Q on 11/09/2017|
Notes to Unaudited Condensed Consolidated Financial Statements
The Reorganization was accounted for as a change in reporting entity, and the condensed consolidated financial statements have been retrospectively adjusted for all periods presented to reflect the new organizational structure following the Reorganization, including the presentation of discontinued operations associated with the Bricks Disposition.
Concurrent with the completion of the IPO, Forterra entered into a new $300 million asset based revolving credit facility for working capital and general corporate purposes (the “2016 Revolver”) and a new $1.05 billion senior term loan facility (“2016 Senior Term Loan”), the proceeds of which, together with a $125.0 million draw on the 2016 Revolver and $296.0 million in proceeds from the IPO, were used to repay in full and terminate the then-existing asset based revolving credit facility (the “2015 Revolver”), $1.04 billion senior term loan (the “2015 Senior Term Loan”) and $260.0 million junior term loan (the “Junior term Loan”) (collectively, the “Refinancing”). On May 1, 2017, the Company amended the 2016 Senior Term Loan to increase the principal outstanding by an additional $200.0 million and to reduce the interest margin applicable to the full balance of the 2016 Senior Term Loan.
The terms of the 2016 Senior Term Loan and the 2016 Revolver are described in greater detail in Note 11, Debt and deferred financing costs.
On July 31, 2017, the Company sold its U.S. concrete and steel pressure pipe business to Thompson Pipe Group (“TPG”) for aggregate consideration of $23.2 million (the “U.S. Pressure Pipe Divestiture”), as well as certain assets relating to a U.S. drainage facility. The Company used the net proceeds from the transaction to partially pay down the balance outstanding on its 2016 Revolver. The U.S. Pressure Pipe Divestiture generated a loss of $31.6 million recorded in other expense, net in the Company's condensed consolidated statements of operations. In addition, during the second quarter of 2017, in connection with the pending U.S. Pressure Pipe Divestiture, the Company recorded a pre-tax long-lived asset impairment charge of $7.5 million within impairment and exit charges in the Company's condensed consolidated statements of operations. See Note 20, Discontinued operations and divestitures for additional details regarding the transaction.