AMTROL Inc. has announced that it and certain affiliated companies filed voluntary petitions for reorganization under Chapter 11 of the U.S. Bankruptcy Code on December 18, 2006. AMTROL took this action to complete a financial restructuring in order to reduce the company’s debt and to improve its long-term financial stability. Note holders representing more than two-thirds of the $97.8 million of the company’s senior subordinated notes outstanding have agreed in principle to convert their notes to equity as part of the restructuring.
AMTROL expects to continue to operate in the normal course of business during the Chapter 11 reorganization process. All of the company’s manufacturing and distribution facilities are open and continuing to serve customers in the normal course; AMTROL’s foreign operations are not involved in the filing.
Larry Guillemette, AMTROL’s chairman, president and chief executive officer, says: “For several years, AMTROL has been constrained by its highly leveraged capital structure. Quite simply, we have too much debt. The conversion of our subordinated debt to equity will provide a strong foundation for a new capital structure that will allow us to invest in the business and compete more effectively in the marketplace.”
Guillemette continues, “Fortunately, AMTROL’s businesses remain fundamentally sound and profitable. We expect that AMTROL will emerge from this reorganization a stronger, more financially stable company, well-positioned for profitable growth.”
AMTROL expects its operations to function normally during the reorganization process, with little impact on how it conducts business:
- Customers will be served in the normal course. AMTROL’s manufacturing and distribution facilities are open on normal schedules, and the company will continue to fulfill customer orders and provide uninterrupted customer service. The company will honor all commitments to its customers, including warranties and the payment of sales rebates in the normal course.
- Suppliers will be paid. AMTROL will continue paying suppliers for all goods and services they provide after the filing. The restructuring anticipates that all suppliers will be paid in full for goods and services provided before the filing.
- Employees will be paid. AMTROL will pay all wages and benefits for active employees as usual and without interruption. Likewise, the company will provide its independent sales representatives with their usual commissions on a timely basis.