Allen Systems Group, Inc. Reaches Agreement with Senior Lenders on Comprehensive Debt Restructuring

Allen Systems Group, Inc. (“ASG” or the “Company”), a recognized innovator in enterprise IT software solutions, announced today that it has reached an agreement with its senior secured lenders -- composed of a consortium led by certain funds sponsored by Franklin Square Capital Partners (that are sub-advised by Blackstone’s (NYSE:BX) credit arm, GSO Capital Partners LP), KKR Credit Advisors (US) LLC, Cetus Capital II, LLC and Ellis Lake Capital, LLC -- on the terms of a comprehensive debt restructuring. The parties intend to implement the debt restructuring through a “pre-packaged” Chapter 11 process. During this period, the Company expects to operate its business in the ordinary course, without disruption to its customers, vendors or employees.

Under the terms of the agreement, the Company’s long-term debt will be reduced by $420 million and the remaining debt of $240 million will be refinanced at a much lower interest rate, significantly strengthening ASG’s balance sheet and improving future cash flow. In addition to “pre-packaged” Chapter 11 petitions, ASG also filed today with the United States Bankruptcy Court for the District of Delaware (the “Court”) a proposed plan of reorganization (the “Plan”) that incorporates the terms of the restructuring agreement and is subject to approval by the Court. ASG has asked the Court to schedule a Plan confirmation hearing within 45 days and expects to be able to emerge from Chapter 11 within the next 45-90 days. Upon emergence from Chapter 11, it is expected that ASG’s senior secured lenders, which include some of the largest and most sophisticated investors in the world, will hold a controlling interest in the Company.

ASG’s non-U.S. subsidiaries were not included in the filing and are unaffected by the Chapter 11 process.

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“Operationally, very little, if anything, is expected to change during the Chapter 11 process,” said John DiDonato, president and chief restructuring officer of ASG. “We do not anticipate customers, employees or suppliers will experience any change in the way we do business, and we expect their experience will improve after the process is complete. Once this debt restructuring is implemented, ASG will have a more serviceable level of debt. We expect to be much better positioned to compete in our industry as a result of having capital to invest in growth, which will allow us to become an even more valuable partner for our customers and other business partners.”

“This agreement demonstrates the shared commitment of all parties to implement a successful transformation of the business,” said Brad Marshall, senior managing director and portfolio manager of GSO Capital Partners. “This is the logical next step toward providing the Company with the flexibility to execute on its long-term strategy and maintain its strong focus on providing customers with leading and innovative IT solutions.”

In conjunction with the Chapter 11 filing, ASG has secured a commitment from NewStar Business Credit to provide a $40 million debtor-in-possession (“DIP”) credit facility. Upon approval by the Court, the DIP facility, together with the Company's available cash reserves and cash provided by operations, is expected to provide sufficient liquidity for ASG to continue meeting its business obligations and conduct business as usual during the Chapter 11 process.

Rothschild Inc. is acting as financial advisor to ASG and Huron Consulting Group is acting as restructuring advisor. Latham & Watkins and Pachulski Stang Ziehl & Jones are acting as the Company’s legal counsel in connection with the debt restructuring. For more information about the Chapter 11 case, including access to Court documents, please visit: http://dm.epiq11.com/ASG.

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About ASG Software Solutions

ASG Software Solutions connects sophistication and experience with agility and technological efficiency, through its vendor-agnostic cloud, content and systems solutions. ASG helps companies solve today’s most pressing business issues, including everything from reducing operating costs and enhancing workforce productivity to ensuring regulatory compliance. With customers like American Express, Coca-Cola, GE, HSBC, IBM, Lockheed Martin, Merrill Lynch, Procter & Gamble, Sony, Verizon, and Wells Fargo, ASG can proudly say that more than 70 percent of global Fortune 500 companies trust it to optimize their existing IT investments. Founded in 1986, ASG Software Solutions is a global company headquartered in Naples, Florida, USA, with more than 1,000 employees. For more information, visit www.asg.com or find us on Facebook, LinkedIn, Twitter or YouTube.