Tank manufacturer CST Industries has reached agreement on the firm’s sale to asset management outfit Solace Capital. CST filed for Chapter 11 bankruptcy in June this year citing a lack of liquidity caused by “a chain of events put into motion by one of CST’s large unsecured creditors, who rejected several attractive, formal letters of intent from third parties”, according to CEO Tim Carpenter.
Business weakness resulting from a downturn in oil & gas markets and in the Middle East water tank market compounded the problem, eventually forcing CST to default on US$57.5 million in senior secured debt as well as the company’s $114 million in unsecured obligations.
In September, Solace offered $93 million for substantially all the assets of CST. Now the company will be rolled into a new vehicle, Solace CST LLC.
“This is great news for CST. We have a partner in Solace that shares our vision and recognises our potential for continued growth,” said Carpenter. “Our valued employees, customers and vendors will benefit from this partnership.”
CST anticipates the sale closing and emerging from its court-supervised restructuring in early December.
24th November 2017