Monitronics Expects to Emerge From Chapter 11 in Early September

The wholesale monitoring and smart home services provider says it will reorganize with significantly less debt and access to new sources of capital.

ENGLEWOOD, Colo. — Monitronics Int’l, the wholly owned subsidiary of Ascent Capital Group (OTC: ASCMA, ASCMB), announced the U.S. Bankruptcy Court for the Southern District of Texas has confirmed the joint partial prepackaged plan to reorganize the company, which goes to market as Brinks Home Security.

The confirmation clears the path for Monitronics to emerge from Chapter 11 protection in early September, if not earlier, with significantly less debt and access to new sources of capital that will support continued growth and innovation, the announcement states.

“The Court’s confirmation of our Plan is a key milestone — paving the way for us to emerge from this process as an even stronger service provider, innovator, employer and business partner, with what we believe is the strongest balance sheet in the industry,” says Jeffery Gardner, president and CEO of Monitronics.

Gardner continues, “We are proud to have served our customers and honored our commitments to our business partners without interruption throughout this process. We are confident we will successfully complete this process in the near term and look forward to a new stage of accelerated, strategic growth as one of the nation’s largest home security and alarm monitoring companies.”

After rebranding from Monitronics to MONI in 2016, the company then entered an exclusive trademark licensing agreement with The Brink’s Co. in early 2018 to be remade into Brinks Home Security.

In compliance with the confirmed plan, Monitronics will eliminate approximately $885 million in debt. Up to approximately $685 million of debt will be converted to equity, including up to approximately $585 million aggregate principal amount of the company’s 9.125% senior notes due 2020 and $100 million of the company’s term loans.

Approximately $822.5 million of the company’s term loans will be converted into a takeback term loan facility. The company also expects to receive $177 million in proceeds through an equity rights offering, and an additional $23 million from either Ascent Capital or a group of the company’s noteholders. The cash will be used, among other things, to repay term and revolving loan debt.

Additionally, upon emergence the company will gain access to $295 million (consisting of a $150 million term loan facility, and a $145 million revolving facility) in exit financing to ensure it can continue to execute on its strategic plan.

Concurrent with the completion of the reorganization of Monitronics, subject to certain conditions (including requisite approval of Ascent’s stockholders at a special meeting to be held Aug. 21.), Ascent anticipates that it will consummate the proposed merger with Monitronics.

You can read more about the restructuring agreement here and here.

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