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 also previously disclosed, following evaluation of all qualified bids
received by 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
Operations Pty Ltd (formerly known as 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 (collectively, the "Cowes Bay Buyers"),
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 Australia 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"), for the purchase of all of 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, for a purchase price of $59 million in cash. The Purchase Agreements
were approved by the Bankruptcy Court on July 13, 2022.
On August 23, 2022, the Company and AFI Australia consummated the transactions
contemplated by the Australia Purchase Agreement and closed on the sale of
substantially all of the assets of AFI Australia to the Cowes Bay Buyers. With
the consummation of the transactions contemplated by the Australia Purchase
Agreement as of August 23, 2022, the Company has now consummated the
transactions contemplated by each of the Purchase Agreements and has completed
the sale of substantially all of its assets.
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Cautionary Information Regarding Trading in the Company's Securities.
As described in greater detail in Item 2.01 above, the Company has, directly or
indirectly, sold substantially all of its assets globally, the Company is now
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.
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit No. Description
104 Cover Page Interactive Data File (formatted as inline XBRL)
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