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Subsequent Events | 12 Months Ended
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Dec. 31, 2015
Subsequent Events [Abstract] |
Subsequent Events | Subsequent Events In connection with the previously announced spin-off (the “Spin-Off”) of Manitowoc Foodservice, Inc. (“MFS”) from Manitowoc the company entered into the following material agreements related to the debt financing for MFS and Manitowoc. Foodservice Escrow Agreement On February 5, 2016, in connection with the Spin-Off of MFS from Manitowoc, MFS entered into an escrow agreement (the “Escrow Agreement”) among MFS, its subsidiary Enodis Holdings Limited, a corporation organized under the laws of the United Kingdom (the “UK Borrower”), the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent and as escrow agent, pursuant to which the parties thereto have delivered in escrow executed signature pages to a credit agreement (the “Credit Agreement”) for a new senior secured revolving credit facility in an aggregate principal amount of $225 million (the “Revolving Facility”) and a senior secured term loan B facility in an aggregate principal amount of $975 million (the “Term Loan Facility,” and together with the Revolving Facility, the “Credit Facilities”) with JPMorgan Chase Bank, N.A, as administrative agent and collateral agent, J.P. Morgan Securities LLC, Goldman Sachs Bank USA, HSBC Securities (USA) Inc., and Citigroup Global Markets Inc., on behalf of certain of its affiliates, as joint lead arrangers and joint bookrunners, and certain lenders, as lenders. The Revolving Facility will include (i) a $20 million sublimit for the issuance of letters of credit on customary terms, and (ii) a $40 million sublimit for swingline loans on customary terms. Pursuant to the Escrow Agreement, the executed signature pages will be released from escrow only upon written notice from MFS and the UK Borrower to JPMorgan Chase Bank, N.A., in its capacity as escrow agent under the Escrow Agreement. The escrowed Credit Agreement will become effective upon delivery of such notice. MFS expects to enter into security and other agreements relating to the Credit Agreement governing the Revolving Facility and the Term Loan Facility. The Term Loan Facility proceeds will be used in part to repay existing debt, and for the payment of a cash dividend to Manitowoc in an amount sufficient to repay certain of Manitowoc existing debt and credit facilities (the “Foodservice Dividend”) in connection with the contribution of certain assets to MFS immediately prior to the completion of the Spin-Off. Any proceeds remaining after the payment of the Foodservice Dividend will be used by MFS for general corporate purposes. Borrowings under the Credit Facilities are expected to bear interest at a rate per annum equal to, at the option of MFS, (i) LIBOR plus the applicable margin of approximately 4.75% for term loans subject to a 1.00% LIBOR floor and 1.50% to 2.75% for revolving loans, based on consolidated total leverage, or (ii) an alternate base rate plus the applicable margin, which will be 1.00% lower than for LIBOR loans. Foodservice Notes Purchase Agreement On February 18, 2016, in connection with the previously announced Spin-Off, MFS’s wholly owned subsidiary, MTW Foodservice Escrow Corp. (the “Foodservice Escrow Issuer”), entered into an indenture (the “Foodservice Indenture”) with Wells Fargo Bank, National Association, as trustee (in such capacity, the “Foodservice Trustee”). Pursuant to the Foodservice Indenture, on the same date, the Foodservice Escrow Issuer issued $425 million in aggregate principal amount of the Foodservice Escrow Issuer’s 9.500% senior notes due 2024 (the “Foodservice Notes”). The Foodservice Notes bear interest at a rate of 9.500% per year, payable in cash semi-annually on February 15 and August 15 of each year, commencing on August 15, 2016. The Foodservice Notes will mature on February 15, 2024, unless earlier repurchased or redeemed. The Foodservice Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and will be resold by the initial purchasers (the “Foodservice Purchasers”) to qualified institutional buyers pursuant to Rule 144A (and outside the United States in reliance on Regulation S) under the Securities Act. Following the issuance of the Foodservice Notes, the Foodservice Escrow Issuer and MFS deposited the proceeds from the Foodservice Notes, together with an amount sufficient to fund a special mandatory redemption, as described below, into a segregated escrow account (the “Foodservice Escrow Account”). The funds will be released from escrow (the “Foodservice Escrow Release”) upon the delivery of an officers’ certificate to the escrow agent certifying, among other things, that substantially concurrently with the Foodservice Escrow Release, the following conditions will be satisfied:
• | the Spin-Off will be consummated within five business days and no later than July 1, 2016;
• | MFS will use the escrowed funds to (i) pay a cash dividend to Manitowoc in an amount sufficient, together with Manitowoc’s other cash on hand, to repay certain of Manitowoc’s existing debt and credit facilities (the “Foodservice Dividend”) and (ii) pay certain fees and expenses, and Manitowoc will use the proceeds from the Foodservice Dividend accordingly;
• | substantially concurrently with the Foodservice Escrow Release, the lenders under MFS’s new senior secured term loan B facility (the “Term Loan Facility”) will fund the term loan thereunder in an aggregate principal amount of at least $975 million, less any applicable discounts, fees and expenses;
• | immediately prior to the Foodservice Escrow Release, the Foodservice Escrow Issuer will be merged with and into MFS (the “Foodservice Escrow Merger”);
• | immediately prior to the Foodservice Escrow Release, MFS and each of its domestic restricted subsidiaries that is a borrower or a guarantor under the Term Loan Facility and MFS’s new senior secured revolving credit facility (the “Foodservice Guarantors”) will have executed a supplemental indenture pursuant to which MFS will assume the Foodservice Escrow Issuer’s obligations under the Foodservice Notes and the Foodservice Indenture and the Foodservice Guarantors will guarantee the Foodservice Notes as of the date of the Foodservice Escrow Release;
• | immediately prior to the Foodservice Escrow Release, MFS and the Foodservice Guarantors will execute a joinder to a related registration rights agreement;
• | MFS, the Foodservice Escrow Issuer and the Foodservice Guarantors will deliver certain opinions of counsel to the Foodservice Trustee and the Foodservice Purchasers, as required under the Foodservice Indenture and the purchase agreement related to the Foodservice Notes; and
• | no event of default under the Foodservice Indenture shall have occurred and be continuing (or would result therefrom).
If (x) by July 1, 2016, the escrow agent and the Foodservice Trustee have not received the officers’ certificate regarding the conditions for the Foodservice Escrow Release described above or (y) at any time prior to the Foodservice Escrow Release, (i) the Foodservice Escrow Issuer notifies the Foodservice Trustee in writing that the board of directors of Manitowoc has determined, in its sole and absolute discretion, that the Spin-Off is not in the best interests of Manitowoc or its shareholders or is otherwise not advisable and that Manitowoc will not pursue the completion of the Spin-Off, (ii) Manitowoc, in its sole discretion, publicly announces that it will not pursue the completion of the Spin-Off or (iii) the Foodservice Escrow Issuer notifies the Foodservice Trustee in writing that the conditions for the Foodservice Escrow Release cannot be satisfied on or prior to July 1, 2016, the Foodservice Escrow Issuer will be required to notify noteholders and redeem the Foodservice Notes within five business days thereafter at a special mandatory redemption price equal to 100% of the principal amount of the Foodservice Notes, together with the interest accrued on the Foodservice Notes from the issue date to but excluding the date of redemption. From and after the Foodservice Escrow Release, the Foodservice Notes will be fully and unconditionally guaranteed, jointly and severally, on an unsecured basis by the Foodservice Guarantors. Prior to the Foodservice Escrow Release, the Foodservice Notes will be secured by a first-priority lien on and security interest in the Foodservice Escrow Account and the escrowed funds therein. From and after the Foodservice Escrow Release, the Foodservice Notes and the subsidiary guarantees will be senior unsecured obligations. The Foodservice Escrow Issuer or, after the Foodservice Escrow Merger, MFS may redeem some or all of the Foodservice Notes from time to time at a redemption price equal to the principal amount of the notes to be redeemed plus certain premiums as set forth in the Foodservice Indenture. The Foodservice Escrow Issuer or, after the Foodservice Escrow Merger, MFS must generally offer to repurchase all of the outstanding Foodservice Notes upon the occurrence of certain specific change of control events at a purchase price equal to 101% of the principal amount of Foodservice Notes purchased plus accrued and unpaid interest to the date of purchase. The Foodservice Indenture provides for customary events of default, including with respect to the escrow arrangements. Generally, if an event of default occurs (subject to certain exceptions), the Foodservice Trustee or the holders of at least 25% in aggregate principal amount of the then-outstanding Foodservice Notes may declare all the Foodservice Notes to be due and payable immediately. Among other things, the Foodservice Indenture also limits the ability of MFS and its subsidiaries to engage in certain activities, including: incurring additional indebtedness or issuing certain preferred stock; paying dividends or making certain other restricted payments; incurring liens; entering into certain types of transactions with affiliates; and consolidating or merging with or into other companies or undergoing certain other fundamental changes (excluding the Foodservice Escrow Merger and the Spin-Off). If, in the future, the Foodservice Notes have investment grade credit ratings and no default or event of default exists under the Foodservice Indenture, certain of these covenants will no longer apply to the Foodservice Notes for so long as the Foodservice Notes are rated investment grade. These and other covenants contained in the Indenture are subject to important exceptions and qualifications. Cranes Indenture On February 18, 2016, also in connection with the Spin-Off, Manitowoc’s wholly owned subsidiary, MTW Cranes Escrow Corp. (the “Cranes Escrow Issuer”), entered into an indenture (the “Cranes Indenture”) with Wells Fargo Bank, National Association, as trustee (in such capacity, the “Cranes Trustee”) and as collateral agent. Pursuant to the Cranes Indenture, on the same date, the Cranes Escrow Issuer issued $260 million in aggregate principal amount of its 12.75% in aggregate principal amount of its 12.75% per year, payable in cash semi-annually on February 15 and August 15 of each year, commencing on August 15, 2016. The Cranes Notes will mature on August 15, 2021, unless earlier repurchased or redeemed. The Cranes Notes have not been registered under the Securities Act, and will be resold by the initial purchasers (the “Cranes Purchasers”) to qualified institutional buyers pursuant to Rule 144A (and outside the United States in reliance on Regulation S) under the Securities Act. Following the issuance of the Cranes Notes, the Cranes Escrow Issuer and Manitowoc deposited the net proceeds from the Cranes Notes, together with an amount sufficient to fund a special mandatory redemption, as described below, into a segregated escrow account (the “Cranes Escrow Account”). The funds will be released from escrow (the “Cranes Escrow Release”) upon the delivery of an officer’s certificate to the escrow agent certifying, among other things, that substantially concurrently with the Cranes Escrow Release the following conditions will be satisfied:
• | the Spin-Off will be consummated within five business days and no later than July 1, 2016;
• | Manitowoc will use the escrowed funds, together with the proceeds of the Foodservice Dividend and other borrowings, to (i) repay all of Manitowoc’s outstanding $600 million aggregate principal amount of 8.50% senior notes due 2020 and all of Manitowoc’s $300 million aggregate principal amount of 5.875% senior notes due 2022; (ii) repay all amounts outstanding under, and to terminate, Manitowoc’s existing revolving credit facility and term loan facilities; (iii) repay certain other debt of Manitowoc’s subsidiaries; and (iv) pay certain fees and expenses;
• | immediately prior to the Cranes Escrow Release, the Cranes Escrow Issuer will be merged with and into Manitowoc (the “Cranes Escrow Merger”);
• | immediately prior to the Cranes Escrow Release, Manitowoc and each of Manitowoc’s domestic restricted subsidiaries that is a borrower or a guarantor under an asset-based revolving credit facility that Manitowoc expects to enter into on or about the date of the Cranes Escrow Release (the “Cranes Guarantors”) will have executed a supplemental indenture, pursuant to which Manitowoc will assume the Cranes Escrow Issuer’s obligations under the Cranes Notes and the Cranes Indenture and the Cranes Guarantors will guarantee the Cranes Notes as of the date of the Cranes Escrow Release;
• | Manitowoc, the Cranes Escrow Issuer and the Cranes Guarantors will deliver certain opinions of counsel to the Cranes Trustee and the Cranes Purchasers, as required under the Cranes Indenture and the purchase agreement related to the Cranes Notes; and
• | no event of default under the Cranes Indenture shall have occurred and be continuing (or would result therefrom).
If (x) by July 1, 2016, the escrow agent and the Cranes Trustee have not received the officers’ certificate regarding the conditions for the Cranes Escrow Release described above or (y) at any time prior to the Cranes Escrow Release, (i) the Cranes Escrow Issuer notifies the Cranes Trustee in writing that the board of directors of Manitowoc has determined, in its sole and absolute discretion, that the Spin-Off is not in the best interests of Manitowoc or its shareholders or is otherwise not advisable and that Manitowoc will not pursue the completion of the Spin-Off, (ii) Manitowoc, in its sole discretion, publicly announces that it will not pursue the completion of the Spin-Off or (iii) the Cranes Escrow Issuer notifies the Cranes Trustee in writing that the conditions for the Cranes Escrow Release cannot be satisfied on or prior to July 1, 2016, the Cranes Escrow Issuer will be required to notify noteholders and redeem the Cranes Notes within five business days thereafter at a special mandatory redemption price equal to 100% of the issue price of the Cranes Notes, together with the interest accrued on the Cranes Notes from the issue date to but excluding the date of redemption. Prior to the Cranes Escrow Release, the Cranes Notes will be secured by a first-priority lien on and security interest in the Cranes Escrow Account and the escrowed funds therein. From and after the Cranes Escrow Release, the Cranes Notes will be fully and unconditionally guaranteed, jointly and severally, on a senior secured second lien basis by each of the Cranes Guarantors. From and after the Cranes Escrow Release, the Cranes Notes and the related guarantees will be secured by, and noteholders will have a second-priority security interest in, all capital stock held by Manitowoc and the Cranes Guarantors and substantially all of the other property and assets held by Manitowoc and the Cranes Guarantors, except for certain specific excluded assets. The Cranes Escrow Issuer or, after the Cranes Escrow Merger, Manitowoc may redeem some or all of the Cranes Notes from time to time at a redemption price equal to the principal amount of the notes to be redeemed plus certain premiums as set forth in the Cranes Indenture. The Cranes Escrow Issuer or, after the Cranes Escrow Merger, Manitowoc must generally offer to repurchase all of the outstanding Cranes Notes upon the occurrence of certain specific change of control events at a purchase price equal to 101% of the principal amount of Cranes Notes purchased plus accrued and unpaid interest to the date of purchase. The Cranes Indenture provides for customary events of default, including with respect to the escrow arrangements. Generally, if an event of default occurs (subject to certain exceptions), the Cranes Trustee or the holders of at least 25% in aggregate principal amount of the then-outstanding Cranes Notes may declare all the Cranes Notes to be due and payable immediately. Among other things, the Cranes Indenture also limits the ability of Manitowoc and its subsidiaries to engage in certain activities, including: incurring additional indebtedness or issuing certain preferred stock; paying dividends or making certain other restricted payments; incurring liens; entering into certain types of transactions with affiliates; and consolidating or merging with or into other companies (excluding the Cranes Escrow Merger and the Spin-Off). These and other covenants contained in the Indenture are subject to important exceptions and qualifications.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References No definition available. + Details
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