Aug 2, 2016

Tweet Whitebox Advisors LLC disclosed that they own a 27.9% stake in Trio Merger Corp (NASDAQ:TRIO) in a Form 13D disclosure that was filed with the SEC on Tuesday, August 2nd. The investor owns 2,609,039 shares of the stock worth about $26,925,282. The reporting parties listed on the disclosure included Whitebox Advisors LLC, Whitebox General Partner LLC, Whitebox MultiStrategy Partners, LP, Whitebox Credit Partners, LP and WBox 20157 Ltd. The disclosure is available through EDGAR at this hyperlink . Whitebox Advisors LLC provided the following explanation of their ownership: RESTRUCTURING On June 13, 2016, the Issuer and certain members of the Issuers management, entered into a comprehensive restructuring support agreement (the “Restructuring Support Agreement”) with WA and other holders (the “Supporting Holders”) of approximately 66% of the par value of the Issuers 10.000% Senior Secured Notes due 2019 (the “Existing Notes”), pursuant to which the Supporting Holders and the Issuer agreed to enter into and implement a proposed comprehensive restructuring of the Issuers balance sheet, including an agreement to fund up to $30 million in new capital (see “New Senior Loan Facility” below). The Restructuring Support Agreement contemplated the following transactions: (i) the Supporting Holders entry into the New Senior Loan Facility; (ii) the Exchange Offer (as defined below); (iii) the amending and restating of the Intercreditor Agreement (as described in Item 6); (iv) the issuance of two series of warrants to the existing holders of the Issuer Shares; (v) amendment and ratification of new employment agreements with members of senior management of the Issuer, the entry into a new management incentive plan, and the issuance of equity to the members of management; and (vi) the amendment of the certain organizational documents (i) – (vi) together, the “Restructuring”). In addition, the Restructuring Support Agreement provides that upon the Closing Date (as defined below), the Supporting Holders have the right to introduce a new slate of directors, and pursuant to the Restructuring Support Agreement, the Supporting Holders will have the right to designate six of the Issuers new seven member Board of Directors. Each of WA and one other Supporting Holder shall retain the right to designate one director nominee for so long as its ownership of outstanding Shares is more than 10%. WA has appointed Jake Mercer, who also serves as a Portfolio Manager of WA. The summary of the Restructuring Support Agreement set forth above does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which is being filed as Exhibit D hereto and is incorporated herein by reference. NEW SENIOR LOAN FACILITY In connection with the Restructuring, on June 29, 2016, the Issuer, as borrower, and each of the Issuers domestic subsidiaries, as guarantors (the “Guarantors”), entered into a new senior secured multidraw term loan facility (the “New Senior Loan Facility”) with the lenders, including WBox 20157 Ltd., the Supporting Holders, from time to time party thereto, and Delaware Trust Company, as collateral agent and administrative agent (the “New Senior Loan Facility Agent”). In addition to the Supporting Holders, holders of Existing Notes that participated in the Exchange Offer, may participate as lenders in the New Senior Loan Facility based on their proportionate ownership of Existing Notes. As part of the consideration for providing the New Senior Loan Facility, the Issuer has issued to the lenders, which include the Supporting Holders, 2,803,302 Shares (the “New Senior Loan Shares”). The New Senior Loan Shares were issued upon the consummation of the Exchange Offer, which occurred on July 27, 2016 (the “Closing Date”). The New Senior Loan Shares were issued directly to the lenders under the New Senior Loan Facility pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended, under Section 4(a)(2) thereunder. The summary of the New Senior Loan Facility set forth above does not purport to be complete and is qualified in its entirety by reference to such agreement, a copy of which is being filed as Exhibit E hereto and is incorporated herein by reference. EXCHANGE OFFER AND CONSENT SOLICITATION In connection with the Restructuring, on July 27, 2016, the Issuer completed an exchange offer and consent solicitation (the “Exchange Offer”) related to the Existing Notes. In exchange for $138,128,000 in aggregate principal amount of the Existing Notes, representing approximately 98.7% of the outstanding aggregate principal amount of the Existing Notes, validly tendered (and not validly withdrawn) in the Exchange Offer, the Issuer issued (i) $69,064,000 aggregate principal amount of new 10.000% Senior Secured Second Lien Notes due 2019 (the “New Notes”) and (ii) 6,410,502 new shares of the Issuers Shares, after giving effect to a 135to1 reverse stock split. The Issuer delivered cash in lieu of any fractional shares. In addition, each participating holder received accrued and unpaid interest on its tendered Existing Notes that were accepted for exchange from their last interest payment date to, but not including, the settlement date, which was paid in the form of additional New Notes, in an aggregate amount of $7,458,912. The New Notes will bear interest at a rate of 10.000% per annum payable in cash, accruing from the settlement date, provided that for each interest payment through and including July 15, 2017, SAE may, at its option, pay interest in kind by issuing additional New Notes (“PIK Notes”). Interest paid in kind will accrue at a rate per annum of 11.0%, and any PIK Notes will be fungible with, and will accrue interest at the same rate as, the New Notes. Concurrently with the Exchange Offer, the Company solicited consents from holders of the Existing Notes to adopt certain proposed amendments to the Indenture under which the Existing Notes were issued, the existing Intercreditor Agreement and related collateral and security agreements relating to the Existing Notes. The summary of the Exchange Offer Memorandum and Consent Solicitation dated June 24, 2016 (the “Memorandum”) set forth above does not purport to be complete and is qualified by reference to the Memorandum. The Reporting Persons reserve the right to revise their plans or intentions at any time and to take any and all actions that they may deem appropriate to maximize the value of their investment in the Issuer in light of their general investment policies, market conditions, subsequent developments affecting the Issuer and the general business and future prospects of the Issuer. The Reporting Persons have no plans or proposals as of the date of this filing which, other than as expressly set forth above, relate to, or would result in, any of the actions enumerated in clauses (a) through (j) of Item 4 of Schedule 13D. Want to see what other hedge funds are holding TRIO? Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Trio Merger Corp (NASDAQ:TRIO). 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