Item 7.01 Regulation FD Disclosure.
On November 2, 2020, Tupperware Brands Corporation (the "Company") issued a
press release announcing the execution of the Commitment Letter (defined below)
and the plan to deliver a conditional notice of redemption relating to the Notes
Redemption (defined below). The press release is attached as Exhibit 99.1 to
this Current Report and incorporated into this Item 7.01 by reference.
The information contained under Item 7.01 of this Current Report on Form 8-K is
being furnished and shall not be deemed "filed" for 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 deemed
incorporated by reference in any filing under the Securities Act of 1933, as
amended, or the Exchange Act, except as expressly set forth by specific
reference in such a filing.
Item 8.01 Other Events.
Term Loan Facilities Commitment Letter
On November 2, 2020, the Company entered into a commitment letter (the
"Commitment Letter") with Angelo, Gordon & Co., L.P. ("Angelo Gordon"), on
behalf of certain of its managed funds and accounts, and JPMorgan Chase Bank,
N.A., within its Strategic Situations Initiative ("JPMorgan" and, together with
Angelo Gordon, the "Commitment Parties"), pursuant to which the Commitment
Parties have agreed to provide (x) a secured term loan facility (the "Parent
Term Loan Facility") in an aggregate principal amount of $200 million and (y) a
secured term loan facility (the "Dart Term Loan Facility" and, together with the
Parent Term Loan Facility, the "Term Loan Facilities") in an aggregate principal
amount of $75 million, in each case, in accordance with the terms, and subject
to the conditions, set forth in the Commitment Letter. Under the Commitment
Letter, borrowings under the Term Loan Facilities will be available in a single
drawing, respectively, in U.S. Dollars and, in each case, shall bear interest,
at the Company's option, at a rate equal to either (a) the ABR, determined by
reference to the highest of (1) the "U.S. Prime Lending Rate" published by The
Wall Street Journal, (2) the federal funds effective rate from time to time plus
0.50% per annum and (3) the one-month Eurodollar Rate, plus 1.00% per annum,
which shall, regardless of rate used, be no less than 2.0% per annum, or (b) a
Eurodollar Rate for a specified period appearing on Reuters Screen LIBOR01 Page,
which shall be no less than 1.00% per annum, in each case, plus an applicable
margin. Under the Commitment Letter, the applicable margin for each Term Loan
Facility shall initially be 7.75% per annum for ABR borrowings and 8.75% per
annum for Eurodollar Rate borrowings, and in each case, from and after the
delivery of the applicable financial statements for the first full fiscal
quarter following the date of the initial funding of the Term Loan Facilities
(the "Closing Date"), the applicable margin for each Term Loan Facility shall
then be (a) for ABR borrowings, either (1) 7.75% per annum, if the consolidated
leverage ratio is greater than 2.75 to 1.00 or (2) 7.25% per annum, if the
consolidated leverage ratio is less than or equal to 2.75 to 1.00 and (b) for
Eurodollar Rate borrowings, either (1) 8.75% per annum, if the consolidated
leverage ratio is greater than 2.75 to 1.00 or (2) 8.25% per annum, if the
consolidated leverage ratio is less than or equal to 2.75 to 1.00.
The Commitment Letter specifies that the borrower under the Parent Term Loan
Facility will be the Company and such facility will be fully and unconditionally
guaranteed on a joint and several basis by all of the Company's existing and
future domestic subsidiaries that provide a guaranty under the Company's Second
Amended and Restated Credit Agreement, dated as of March 29, 2019 (as amended on
August 28, 2019 and on February 28, 2020, the "Existing Revolving Credit
Agreement") among, inter alia, the Company, the other borrowers party thereto,
the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative
agent. The Commitment Letter does not require (x) an entity to give a guaranty
under the Parent Term Loan Facility if that entity is not required to provide a
guaranty under the Existing Revolving Credit Agreement and (y) the guarantors
under either the Parent Term Loan Facility or the Dart Term Loan Facility to
provide a cross guarantee to or to cross collateralize the other Term Loan
Facility. The Commitment Letter also specifies that the borrower under the Dart
Term Loan Facility will be Dart Industries Inc. ("Dart") and such facility will
be fully and unconditionally guaranteed on a joint and several basis by the
Company and certain of the Company's existing and future domestic and foreign
subsidiaries. Under the Commitment Letter, each Term Loan Facility will mature
on the third anniversary of the Closing Date and will not require any
amortization.
The Commitment Letter specifies that each Term Loan Facility will include a
financial covenant as well as customary affirmative and negative covenants,
including, among other things, as to compliance with laws, delivery of quarterly
and annual financial statements, restrictions on the incurrence of liens,
indebtedness, asset dispositions, fundamental changes, restricted payments and
other customary covenants.
The Commitment Letter also provides that each Term Loan Facility will include
events of default relating to customary matters (and customary notice and cure
periods), including, among other things, nonpayment of principal, interest or
other amounts;
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violation of covenants; incorrectness of representations and warranties in any
material respect; cross-payment default and cross acceleration with respect to
material indebtedness; bankruptcy; material judgments; and certain ERISA events.
The commitment of the Commitment Parties to provide the applicable Term Loan
Facility is subject to certain conditions including, but not limited to, the
negotiation of satisfactory definitive documentation, the concurrent completion
of the Notes Redemption, the accuracy in all material respects of the
representations and warranties contained in the Commitment Letter and the
absence of a default or event of default under the applicable Term Loan Facility
documentation, as applicable.
The termination date for the Commitment Letter is January 1, 2021.
The definitive documentation governing the Term Loan Facilities has not been
finalized and, accordingly, the actual terms may differ from the description of
such terms in the foregoing summary of the Commitment Letter.
Notes Redemption
On November 2, 2020, the Company announced its plan to issue a conditional
notice of redemption to the holders of its outstanding 4.750% Senior Notes due
2021 (the "Notes"), pursuant to the indenture, dated June 2, 2011, among the
Company, Dart Industries, as guarantor, and Wells Fargo Bank, National
Association, as trustee (the "Indenture"), governing the Notes to redeem in full
the entire outstanding aggregate principal amount of the Notes (the "Notes
Redemption" and, together with the Term Loan Facilities, the "Refinancing"). The
Company intends to use the proceeds from the Parent Term Loan Facility, as well
as cash on hand, to fund the Notes Redemption, and the Notes Redemption is
conditioned on the successful completion of the transactions contemplated by the
Commitment Letter. The conditional notice of redemption may be rescinded or
amended if necessary.
This Current Report on Form 8-K does not constitute a notice of redemption and
is qualified in its entirety by reference to the conditional notice of
redemption delivered pursuant to the Indenture.
Forward-Looking Statements
This report contains certain statements that are, or may be deemed to be,
"forward-looking statements." These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions that are
difficult to predict. Actual outcomes and results may differ materially from
those expressed in, or implied by, such forward-looking statements. Words such
as "estimates," "outlook," "guidance," "expect," "believe," "intend,"
"designed," "target," "plans," "may," "will," "should," "would," "could," and
similar words are forward-looking statements and not historical facts. Such
forward-looking statements may include statements relating to the Refinancing,
including the expected terms and timing of the Refinancing and whether the
Refinancing will be completed. These forward-looking statements and related
assumptions involve risks and uncertainties that could cause actual results and
outcomes to differ materially from any forward-looking statements or views
expressed herein.
These risks and uncertainties include, but are not limited to, the following:
the effects of natural disasters, terrorist activities and epidemic or pandemic
disease outbreaks, including the coronavirus ("COVID-19") outbreak; general
economic and political conditions in the United States and in other countries in
which the Company currently does business, including those resulting from the
COVID-19 outbreak, recessions, political events and acts or threats of terrorism
or military conflicts; the success of the Company's efforts to improve its
profitability and liquidity position and any capital structure actions that it
may take; the impact of the Company's substantial indebtedness, including the
effect of the Company's leverage on its liquidity, financial position and
earnings, and the Company's ability and obligation to make payments on its
indebtedness, which could reduce its financial flexibility and ability to fund
other activities; the Company's access to, and the costs of, financing and
refinancing and the potential that banks with which the Company maintains lines
of credit may be unable or unwilling to fulfill their commitments; the costs and
covenant restrictions associated with the Company's credit arrangements and the
Notes; the Company's ability to comply with, or further amend, financial
covenants under its credit agreement; potential downgrades to the Company's
credit ratings; successful recruitment, retention and productivity levels of the
Company's independent sales forces; the ability to attract and retain certain
executive officers and key management personnel and the success of transitions
or changes in leadership or key management personnel; the success of land buyers
in attracting tenants for commercial and residential development and obtaining
required government approvals and financing; disruptions caused by the
introduction of new or revised distributor operating models or sales force
compensation systems or allegations by equity analysts, former distributors or
sales force members, government agencies or others as to the legality or
viability of the Company's business model, particularly in India; disruptions
caused by restructuring activities, including facility reductions or closures,
and the combination and exit of business units, including impacts on business
models and the supply chain, as well as not fully realizing expected savings or
benefits related to increasing sales from actions taken; success of new products
and promotional programs;
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the ability to implement appropriate product mix and pricing strategies;
governmental regulation of materials used in products coming into contact with
food (e.g., polycarbonate and polyethersulfone), as well as beauty, personal
care, essential oils and nutritional products; governmental regulation and
consumer tastes related to the use of plastic in products and/or packaging
material; the ability to procure and pay for at reasonable economic cost,
sufficient raw materials and/or finished goods to meet current and future
consumer demands at reasonable suggested retail pricing levels in certain
markets, particularly those with stringent government regulations and
restrictions; the impact of changes in consumer spending patterns and
preferences, particularly given the global nature of the Company's business; the
value of long-term assets, particularly goodwill and indefinite and
definite-lived intangibles associated with acquisitions, and the realizability
of the value of recognized tax assets; changes in plastic resin prices, other
raw materials and packaging components, the cost of converting such items into
finished goods and procured finished products and the cost of delivering
products to customers; the introduction of Company operations in new markets
outside the United States; general social, economic and political conditions in
markets, such as in Argentina, Brazil, China, France, India, Mexico, Russia and
Turkey and other countries impacted by such events; issues arising out of the
sovereign debt in the countries in which the Company operates, such as in
Argentina and those in the Euro zone, resulting in potential economic and
operational challenges for the Company's supply chains, heightened counterparty
credit risk due to adverse effects on customers and suppliers, exchange controls
(such as in Argentina and Egypt) and translation risks due to potential
impairments of investments in affected markets; disruptions resulting from
either internal or external labor strikes, work stoppages, or similar
difficulties, particularly in Brazil, France, India and South Africa; changes in
cash flow resulting from changes in operating results, including from changes in
foreign exchange rates, restructuring activities, working capital management,
debt payments, share repurchases and hedge settlements; the impact of currency
fluctuations on the value of the Company's operating results, assets,
liabilities and commitments of foreign operations generally, including their
cash balances during and at the end of quarterly reporting periods, the results
of those operations, the cost of sourcing products across geographies and the
success of foreign hedging and risk management strategies; the ability to
repatriate, or otherwise make available, cash in the United States and to do so
at a favorable foreign exchange rate and with favorable tax ramifications,
particularly from Brazil, China, India, Indonesia, Malaysia, Mexico and South
Africa; the ability to obtain all government approvals on, and to control the
cost of infrastructure obligations associated with, property, plant and
equipment; the ability to timely and effectively implement, transition, maintain
and protect necessary information technology systems and infrastructure;
cyberattacks and ransomware demands that could cause the Company to not be able
to operate its systems and/or access or control its data, including private
data; integration of non-traditional product lines into Company operations; the
effect of legal, regulatory and tax proceedings, as well as restrictions imposed
on the Company's operations or Company representatives by foreign governments,
including changes in interpretation of employment status of the sales force by
. . .
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit Number Description
99.1 Press Release of Tupperware Brands Corporation dated November 2, 2020
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
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