Item 2.01 Completion of Acquisition or Disposition of Assets.
As previously disclosed, on May 8, 2022, Armstrong Flooring, Inc., a Delaware
corporation (the "Company"), and its wholly owned subsidiaries Armstrong
Flooring Latin America, Inc., a Delaware corporation ("AFI Latin America"),
Armstrong Flooring Canada Ltd., a British Columbia corporation ("AFI Canada"),
and AFI Licensing LLC, a Delaware limited liability company ("AFI Licensing"
and, together with the Company, AFI Latin America and AFI Canada, the
"Debtors"), filed voluntary petitions for relief under chapter 11 of title 11 of
the United States Code in the United States Bankruptcy Court for the District of
Delaware (the "Bankruptcy Court"). The chapter 11 cases are being administered
under the caption In re Armstrong Flooring, Inc., et
al. (Case No. 22-10426) (the "Chapter 11 Cases").
As previously disclosed, following evaluation of all qualified bids for the
assets of the Company, the Company entered into: (a) a binding Asset Purchase
Agreement (the "North America Purchase Agreement"), dated as of July 10, 2022,
by and among the Debtors and a consortium of buyers consisting of AHF, LLC, a
Delaware limited liability company, and Gordon Brothers Commercial & Industrial,
LLC, a Delaware limited liability company, for the sale of substantially all of
the Company's North American assets for a purchase price of $107 million in cash
(subject to certain adjustments) and assumption of certain specified
liabilities, including certain cure claims and certain equipment leases; (b) a
binding Asset Purchase Agreement (the "Australia Purchase Agreement"), dated as
of July 11, 2022, by and among the Company and Armstrong Flooring Pty Ltd, an
Australian company limited by shares ("AFI Australia"), and Braeside Mills
Investments Pty Ltd, Gippsland Lakes Victoria Holdings Pty Ltd, and HS
McKendrick Family Nominees Pty Ltd as trustee of the Mills Unit Trust, for the
sale of substantially all of AFI Australia's assets for a purchase price of
$31 million in cash and the assumption of certain specified liabilities; and
(c) a Stock Purchase Agreement (the "Asia Purchase Agreement", and collectively
with the North America Purchase Agreement and the Asia Purchase Agreement, the
"Purchase Agreements"), dated as of July 11, 2022, by and between the Company
and Zhejiang GIMIG Technology Co., Ltd., a company established under the laws of
the People's Republic of China ("Giant"), pursuant to which Giant agreed to
purchase the equity interests of Armstrong Flooring Hong Kong Limited, a private
company limited by shares incorporated in Hong Kong and wholly owned subsidiary
of the Company ("AFI Hong Kong"), for a purchase price of $59 million in cash.
The Purchase Agreements were approved by the Bankruptcy Court on July 13, 2022.
On August 1, 2022, the Company consummated the transactions contemplated by the
Asia Purchase Agreement and closed on the sale of the equity interests of AFI
Hong Kong to Giant. The Company continues to cooperate with the Bankruptcy Court
and work alongside its secured creditors to continue operating its business in
Australia while it closes the remaining sale transaction.
2
--------------------------------------------------------------------------------
Cautionary Information Regarding Trading in the Company's Securities.
As described in greater detail in Item 2.01 above, the Company has sold
substantially all of its North American and Asian assets and it has agreed to
sell substantially all of its Australian assets pursuant to the Australia
Purchase Agreement. Following consummation of these sales, the Company is
expected to be wound down. Holders of the Company's equity securities will
likely be entitled to no recovery on their investment following the Chapter 11
Cases, and recoveries to other stakeholders cannot be determined at this time.
The Company cautions that trading in the Company's securities is highly
speculative and poses substantial risks. Trading prices for the Company's
securities may bear little or no relationship to the actual value to be
realized, if any, by holders of the Company's securities in the Chapter 11
Cases. Accordingly, the Company urges extreme caution with respect to existing
and future investments in its securities.
3
--------------------------------------------------------------------------------
© Edgar Online, source Glimpses