Target Hospitality Accelerates Value Creation with Partial Redemption of Senior Secured Notes due 2024

Rhea-AI Summary

Target Hospitality Corp. announced on February 28, 2023 that its subsidiary, Arrow Bidco, LLC, will redeem $125 million of its 9.50% Senior Secured Notes due 2024 on March 15, 2023. This redemption aims to reduce total indebtedness, enhancing the company's balance sheet and financial flexibility. Target emphasizes a commitment to high-return initiatives while progressing towards being net-debt free in 2023. The redemption is seen as a key step in accelerating value creation for stakeholders.

Positive

• Redemption of $125 million in Senior Secured Notes improves balance sheet.
• Focused on reducing total indebtedness enhances financial flexibility.
• Commitment to becoming net-debt free in 2023 supports long-term growth.

Negative

• None.

THE WOODLANDS, Texas, Feb. 28, 2023 /PRNewswire/ -- Target Hospitality Corp. ("Target Hospitality," "Target" or the "Company") (Nasdaq: TH), one of North America's largest providers of vertically integrated modular accommodations and value-added hospitality services, today announced that its indirect subsidiary, Arrow Bidco, LLC, will redeem $125,000,000 in aggregate principal amount of its outstanding 9.50% Senior Secured Notes due 2024 (the "Notes") on March 15, 2023 (the "Redemption Date").

The Notes will be redeemed for a redemption price equal to 100.000% of the principal amount of the Notes redeemed plus accrued and unpaid interest to but not including the Redemption Date (together, the "Redemption Payment"). From and after the Redemption Date, all interest will cease to accrue on the Notes redeemed.

Target has remained focused on reducing total indebtedness, which has materially strengthened its balance sheet and maximized financial flexibility.  The partial redemption of the Notes has advanced these objectives, while simultaneously accelerating value creation.  Target will remain focused on allocating capital to high return initiatives, including strategic growth opportunities, while maintaining progress towards being net-debt free in 2023.  

Investors in the Notes should contact the bank or broker through which they hold a beneficial interest in the Notes for information about obtaining the Redemption Payment for the Notes redeemed in which they have a beneficial interest.

About Target Hospitality

Target Hospitality is one of North America's largest providers of vertically integrated modular accommodations and value-added hospitality services in the United States. Target builds, owns and operates a customized and growing network of communities for a range of end users through a full suite of value-added solutions including premium food service management, concierge, laundry, logistics, security and recreational facilities services.

Cautionary Statement Regarding Forward Looking Statements

Certain statements made in this press release are "forward looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words "estimates," "projected," "expects," "anticipates," "forecasts," "plans," "intends," "believes," "seeks," "may," "will," "should," "future," "propose" and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside our control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, that may affect actual results or outcomes include: the duration of the COVID-19 pandemic or any future public health crisis, related economic repercussions and the resulting negative impact to global economic demand; operational challenges relating to the COVID-19 pandemic and efforts to mitigate the spread of the virus, including logistical challenges, protecting the health and well-being of our employees and customers, government imposed mandates, contract and supply chain disruptions; operational, economic, including inflation, political and regulatory risks; our ability to effectively compete in the specialty rental accommodations and hospitality services industry; effective management of our communities; natural disasters and other business distributions including outbreaks of epidemic or pandemic disease; the effect of changes in state building codes on marketing our buildings; changes in demand within a number of key industry end-markets and geographic regions; our reliance on third party manufacturers and suppliers; failure to retain key personnel; increases in raw material and labor costs; the effect of impairment charges on our operating results; our future operating results fluctuating, failing to match performance or to meet expectations; our exposure to various possible claims and the potential inadequacy of our insurance; unanticipated changes in our tax obligations; our obligations under various laws and regulations; the effect of litigation, judgments, orders, regulatory or customer bankruptcy proceedings on our business; our ability to successfully acquire and integrate new operations; global or local economic and political movements, including any changes in policy under the Biden administration; federal government budgeting and appropriations; our ability to effectively manage our credit risk and collect on our accounts receivable; our ability to fulfill Target Hospitality's public company obligations; any failure of our management information systems;  our ability to meet our debt service requirements and obligations; and risks related to our outstanding obligations in connection with the 9.50% senior notes due 2024. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Investor Contact
Mark Schuck
(832) 702 – 8009           
ir@targethospitality.com

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SOURCE Target Hospitality

FAQ

What is the recent announcement by Target Hospitality Corp. on February 28, 2023?

Target Hospitality announced a partial redemption of $125 million in Senior Secured Notes due 2024, effective March 15, 2023.

How much of the Senior Secured Notes is Target Hospitality redeeming?

Target Hospitality is redeeming $125 million of its 9.50% Senior Secured Notes due 2024.

What is the purpose of the redemption announced by Target Hospitality?

The redemption aims to reduce total indebtedness and enhance financial flexibility.

What does Target Hospitality plan to achieve by being net-debt free in 2023?

Target aims to allocate capital to high-return initiatives and enhance growth opportunities.