ARMSTRONG FLOORING, INC. : Completion of Acquisition or Disposal of Assets (Form 8-K)


Item 2.01 Completion of Acquisition or Disposal of Assets.

As stated earlier, on May 8, 2022, Armstrong Flooring, Inc.a Delaware
company (the “Company”), and its wholly owned subsidiaries Armstrong Flooring Latin America, Inc.a Delaware company (“AFI Latin America”),
Armstrong Flooring Canada Ltd.a British Columbia company (“AFI Canada”), and AFI LLC Licensea Delaware limited liability company (“AFI licenseand, 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 (there “bankruptcy courtChapter 11 cases are administered under In re Armstrong Flooring, Inc., et al. (Case No. 22-10426) (the “Chapter 11 cases”).

As previously disclosed, following the evaluation of all qualified offers for the Company’s assets, the Company has entered into: (a) a binding asset purchase agreement (the “North America Purchase Agreement North”), dated July 10, 2022by and between the Debtors and a consortium of buyers composed of AHF, LLCa
Delaware limited liability company, and Gordon Brothers Commercial & Industrial, LLCa Delaware limited liability company, for the sale of substantially all of the Company’s North American assets for a purchase price of $107 million cash (subject to certain adjustments) and assumption of certain specified liabilities, including certain repair claims and certain equipment leases; (b) a binding asset purchase agreement (the “Australian Purchase Agreement”), dated July 11, 2022by and between the Company and Armstrong Flooring Pty Ltdan Australian company limited by shares (“AFI Australia”), and Braeside Mills Investments Pty Ltd, Gippsland Lakes Victoria Holdings Pty Ltdand HS McKendrick Pty Ltd Family Nominees as trustee of the Mills Unit Trustfor the sale of substantially all of the assets of AFI Australia for a purchase price of
$31 million in cash and the assumption of certain specified liabilities; and (c) a share purchase agreement (the “Asia Purchase Agreement” and, collectively with the North America Purchase Agreement and the Asia Purchase Agreement, the “Asia Purchase Agreements”). “), dated July 11, 2022by and between the Company and Zhejiang GIMIG Technology Co.,Ltd.a company incorporated under the laws of
the People’s Republic of China (“Giant”), pursuant to which Giant agreed to purchase the interests of Armstrong Flooring Hong Kong Limiteda private joint-stock company incorporated in hong kong and wholly-owned subsidiary of the Company (“AFI Hong Kong”), for a purchase price of $59 million in liquid. The purchase contracts have been approved by the bankruptcy court on July 13, 2022.

On August 1, 2022, the Company has completed the transactions contemplated by the Asia Purchase Agreement and has completed the sale of AFI Hong Kong’s interests to Giant. The Company continues to cooperate with the bankruptcy court
and work alongside its secured creditors to continue its operations in
Australia while it closes the remaining sale transaction.


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Disclaimer Regarding Trading in the Company’s Securities.

As further described in 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 Australian Purchase Agreement. Following the completion of these sales, the Company should be liquidated. Equity holders of the Company will likely not be entitled to any recoveries on their investment as a result of the Chapter 11 events, and recoveries for other stakeholders cannot be determined at this time. The Company cautions that trading in the Company’s securities is highly speculative and involves substantial risks. The trading prices of the Company’s securities may bear little or no relation to the actual value to be realized, if any, by holders of the Company’s securities in Chapter 11 Cases. Accordingly, the Company recommends an extreme caution with regard to current and future investments in its securities.


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