Item 1.01. Entry into a Material Definitive Agreement.
Sustainability-Linked Senior Notes
On November 30, 2021, Merger Sub completed its previously announced offering of
$300 million aggregate principal amount of 4.875% sustainability-linked senior
notes due 2029 (the "New Notes"). The New Notes were issued pursuant to that
certain Indenture (the "Indenture"), dated as of November 30, 2021, by and among
Merger Sub, the Company, the guarantors party thereto (the "Guarantors"),
including Parent, and U.S. Bank National Association, as trustee. In connection
with the consummation of the Merger, the Company assumed all of the obligations
of Merger Sub under the Indenture and the New Notes. The New Notes are senior
unsecured obligations of the Company and are guaranteed on a senior unsecured
basis by the Guarantors.
Merger Sub used the net proceeds from the New Notes offering, together with
equity financing provided by affiliates of EQT and the borrowings under the New
Senior Secured Credit Facilities (as defined below), to (i) finance the Merger
pursuant to the Merger Agreement, (ii) repay the Company's existing term loans
and revolving loans under its existing credit facilities, (iii) redeem certain
of the Company's existing debt, including the 2025 Notes (as defined below) and
(iv) pay certain fees and expenses related to the foregoing.
The New Notes will mature on December 1, 2029 and bear interest at a rate of
4.875% per annum, payable semi-annually in cash in arrears on June 1 and
December 1 of each year, beginning on June 1, 2022. Interest on the New Notes
will accrue from November 30, 2021. Under the terms of the New Notes, if the
Company does not satisfy two Sustainability Performance Targets (as defined in
the Indenture) on or prior to December 31, 2025 and provide confirmation with
respect thereof by the Certificate Date (as defined in the Indenture), then from
and including the Certificate Date, the interest rate payable on the New Notes
will increase by 0.125% (if one of the two Sustainability Performance Targets is
satisfied) or 0.250% (if none of the Sustainability Performance Targets are
satisfied).
The Company may redeem all or part of the New Notes at any time prior to
December 1, 2024 at a price equal to 100% of the aggregate principal amount
thereof, plus accrued and unpaid interest to, but excluding, the redemption
. . .
Item 1.02 Termination of a Material Definitive Agreement.
The information set forth in the section above titled "Introduction" and Item
1.01 of this Current Report on Form 8-K are incorporated herein by reference.
Prepayment of the Existing Credit Facility
On November 23, 2021, the Company delivered a notice of prepayment and
termination pursuant to the Second Amended and Restated Credit and Guaranty
Agreement, dated as of August 21, 2018 (as amended, restated, supplemented or
otherwise modified through the date hereof, the "Credit Agreement"), among
Covanta Energy, LLC, the Company, certain subsidiaries, the subsidiary
guarantors party thereto, the lenders party thereto and Bank of America, N.A.,
as administrative agent, collateral agent and issuing bank, to prepay the
aggregate outstanding amount of loans thereunder and terminate the outstanding
commitments thereunder. On November 30, 2021, in connection with the
consummation of the Merger, the Company prepaid the aggregate outstanding amount
of existing loans and terminated the outstanding commitments under the Credit
Agreement.
Item 2.01 Completion of Acquisition or Disposition of Assets.
The information set forth in the section above titled "Introduction" of this
Current Report on Form 8-K is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
The information set forth in the Item 1.01 above is incorporated by reference
into this Item 2.03.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or
Standard; Transfer of Listing.
On November 30, 2021, in connection with the consummation of the Merger, the
Company notified the New York Stock Exchange ("NYSE") that the certificate of
merger had been filed with the Secretary of State of the State of Delaware and
that, at the Effective Time, each share of Company Stock outstanding (other than
shares that were owned, directly or indirectly, by Parent, the Company
(including shares held as treasury stock or otherwise) or Merger Sub immediately
prior to the Effective Time and excluding shares contributed to an affiliate of
Parent by certain members of Covanta management) was converted into the right to
receive the Merger Consideration. In addition, the Company requested that the
NYSE delist the Company Stock on November 30, 2021 and, as a result, trading of
Company Stock, which trades under the symbol "CVA" on the NYSE was suspended
prior to the opening of trading on November 30, 2021. The NYSE filed a
notification of removal from listing on Form 25 with the Securities and Exchange
Commission ("SEC") with respect to the Company Stock to report the delisting of
the Company Stock from the NYSE and to suspend trading of the Company Stock on
the NYSE prior to the opening of trading on November 30, 2021.
The Company intends to file with the SEC a certificate of notice of termination
on Form 15 with respect to the Company Stock, requesting that the Company Stock
be deregistered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and that the reporting obligations of the Company with respect
to the Company Stock under Sections 13 and 15(d) of the Exchange Act be
suspended.
Item 3.03 Material Modification to Rights of Security Holders.
The information set forth in the section above titled "Introduction" and Items
2.01, 3.01, 5.01 and 5.03 of this Current Report on Form 8-K are incorporated
herein by reference.
In connection with the Merger, at the Effective Time, holders of the Company
Stock immediately prior to such time ceased to have any rights as stockholders
of the Company (other than their right to receive the Merger Consideration
pursuant to the terms of the Merger Agreement).
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Item 5.01 Changes in Control of Registrant.
The information set forth in the section above titled "Introduction" and Items
2.01, 5.02 and 5.03 of this Current Report on Form 8-K are incorporated herein
by reference.
As a result of the Merger, a change in control of the Company occurred, and the
Company is now a wholly-owned subsidiary of Parent. Parent is affiliated with,
and controlled by, investment funds advised by EQT.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers
The information set forth in the section above titled "Introduction" and under
Item 2.01 of this Current Report on Form 8-K is incorporated herein by
reference.
In accordance with the terms of the Merger Agreement, at the Effective Time,
each of the 11 directors of the Company prior to consummation of the Merger
(Samuel Zell, David M. Barse, Ronald J. Broglio, Peter C. B. Bynoe, Linda J.
Fisher, Joseph Holsten, Owen Michaelson, Danielle Pletka, Michael W. Ranger,
Robert S. Silberman and Jean Smith) ceased to be directors of the Company. In
accordance with the terms of the Merger Agreement, the directors of Merger Sub
in office immediately prior to consummation of the Merger (Juan Diego Vargas and
Julie Guilbert) became the directors of the Surviving Corporation and will be
the directors of the Surviving Corporation until their successors have been duly
elected or appointed and qualified, or until their earlier death, resignation,
incapacity or removal.
Additionally, at the Effective Time, Michael W. Ranger resigned from and ceased
to hold his position as an officer of the Company and was replaced in such
capacity by Azeez Mohammed. Furthermore, effective November 30, 2021, Timothy J.
Simpson will depart from his position as Chief Administrative Officer of the
Company. In connection with his departure, Mr. Simpson is expected to enter into
a separation agreement with the Company and to receive benefits payable to Mr.
Simpson under the severance plan described in the Company's Proxy Statement
filed with the U.S. Securities and Exchange Commission on September 2, 2021 in
the section titled "Named Executive Officer Equity Award Summary Table-Severance
Plan" beginning on page 69, and that information is incorporated herein by
reference. Mr. Simpson's departure was not the result of any disagreement with
the Company on any matter relating to the Company's operations, policies or
practices. In accordance with the terms of the Merger Agreement, and other than
as described above, the officers of the Company in office immediately prior to
the consummation of the Merger became the officers of the Surviving Corporation
and will be the of the Surviving Corporation until their successors have been
duly elected or appointed and qualified, or until their earlier death,
resignation, incapacity or removal.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
The information set forth in the section above titled "Introduction" and under
Item 2.01 of this Current Report on Form 8-K is incorporated herein by
reference.
At the Effective Time, the certificate of incorporation of the Company, as in
effect immediately prior to the Merger, was amended and restated in its entirety
to be in the form of the certificate of incorporation set forth as Exhibit A to
the Merger Agreement (the "Amended and Restated Certificate of Incorporation").
In addition, at the Effective Time, the Company's bylaws, as in effect
immediately prior to the Merger, were amended and restated in their entirety
(the "Amended and Restated Bylaws").
Copies of the Amended and Restated Certificate of Incorporation of the Company
and the Amended and Restated Bylaws of the Company are attached as Exhibits 3.1
and 3.2, respectively, to this Current Report on Form 8-K and incorporated
herein by reference.
Item 7.01 Regulation FD Disclosure.
On November 30, 2021, the Company issued a press release announcing the
completion of the Merger. A copy of the press release is furnished as Exhibit
99.1 hereto. Such press release shall not be deemed "filed" for purposes of
Section 18 of the Exchange Act, or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing made by
the Company under the Securities Act of 1933, as amended, or the Exchange Act,
except as shall be expressly set forth by specific reference in such a filing.
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Item 8.01 Other Events
Redemption of the 2025 Notes
On November 30, 2021, in connection with the consummation of the Merger, the
Company redeemed all of the outstanding $400.0 million in aggregate principal
amount of its 5.875% senior notes due 2025 (the "2025 Notes") with proceeds from
the financing transactions consummated concurrently with the Merger.
Item 9.01 Financial Statements and Exhibits.
Exhibit
No. Description
2.1 Agreement and Plan of Merger, dated as of July 14, 2021, by and
among Covanta Holding Corporation, Covert Intermediate, Inc. and
Covert Mergeco, Inc. (incorporated by reference to Exhibit 2.1 to the
Current Report on Form 8-K of Covanta Holding Corporation filed on
July 16, 2021)
3.1 Amended and Restated Certificate of Incorporation of Covanta Holding
Corporation
3.2 Amended and Restated Bylaws of Covanta Holding Corporation
4.1 Indenture, dated as of November 30, 2021, by and among Covert
Mergeco, Inc., Covanta Holding Corporation, the guarantors party
thereto and U.S. Bank National Association, as trustee.
4.1(a) Form of 4.875% Sustainability-Linked Senior Notes due 2029 (included
as Exhibit A to Exhibit 4.1).
4.2 Tenth Supplemental Indenture, dated as of November 30, 2021, by and
among Covanta Holding Corporation, the guarantors party thereto and
Wells Fargo Bank, National Association, as trustee.
4.3 Eleventh Supplemental Indenture, dated as of November 30, 2021, by
and among Covanta Holding Corporation, the guarantors party thereto
and Wells Fargo, National Association, as trustee.
10.1 Credit Agreement, dated as of November 30, 2021, by and among Covert
Intermediate, Inc., Covert Mergeco, Inc., Covanta Holding Corporation,
the lenders from time to time party thereto, Barclays Bank PLC, as
administrative agent and collateral agent, and the issuing banks from
time to time party thereto.
99.1 Press Release
104 Cover Page Interactive Data File - the cover page iXBRL tags are
embedded within the Inline XBRL document.
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