PSS Industrial Aims for Out-of-Court Restructuring With Lenders

(Bloomberg) -- PSS Industrial Group, owned by affiliates of Goldman Sachs’s merchant banking division, is in talks with its creditors on a potential out-of-court restructuring, according to people with knowledge of the situation.

The Houston-based industrial equipment supplier is weighing options that could include raising new money and ceding control to certain lenders, said the people, who asked not to be identified because the talks are private.

PSS has tapped law firm Kirkland & Ellis and investment bank Evercore Inc. to advance negotiations, the people said. Meanwhile, a group of lenders including Marblegate Asset Management and Angel Island Capital is being advised by Guggenheim Partners and Akin Gump Strauss Hauer & Feld, they said. 

Representatives at Goldman Sachs declined to comment, while PSS didn’t respond to requests for comment. Kirkland & Ellis and Guggenheim didn’t respond to requests seeking comment. Akin, Marblegate and Evercore declined to comment. Angel Island Capital, a portfolio company of Golden Gate Capital, also declined to comment.

PSS missed interest and principal payments due on March 31, and subsequently got a forbearance agreement with its lenders, according to Moody’s Investors Service.

The company is expected to enter into a restructuring deal with creditors given its weak operating outlook and liquidity crunch, S&P Global Ratings said in a note on April 7.

At the end of September, PSS had $21 million in cash and no availability under its $50 million revolver due 2024. Its approximately $283 million term loan due 2025 is quoted around 52 cents on the dollar, according to data compiled by Bloomberg.

PSS distributes products such as valves and spray equipment to oil and gas, pipelines and other industrial customers. 

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