AMTROL Inc. reported that it has reached an important milestone in its effort to complete a financial restructuring under Chapter 11 of the U.S. Bankruptcy Code. In March, the company and the Official Committee of Unsecured Creditors filed a joint plan of reorganization and related disclosure statement with the U.S. Bankruptcy Court.
The company anticipates that the requisite number and amount of its senior subordinated notes will vote in favor of the plan and, pursuant to the plan, the notes will be exchanged for substantially all of the equity in the reorganized company, thereby reducing the company’s debt by approximately 40 percent, and improving its long-term financial stability. The plan provides for all pre-filing trade liabilities to be paid in full.
AMTROL’s domestic operations are being financed under Chapter 11 with a $115 million debtor-in-possession (DIP) facility provided by Barclays Capital, the investment banking division of Barclays Bank PLC. The company has received a number of commitments to repay the DIP facility with long-term, low-cost financing as it completes the reorganization. The company anticipates that the reorganization will result in a reduction in total annual interest cost of more than 50 percent.
AMTROL has continued to operate in the normal course of business and has experienced no disruptions during the Chapter 11 reorganization process. All of the company’s manufacturing and distribution facilities remain open and are continuing to serve customers. The company also continues to honor all commitments to its customers, including warranties and the payment of sales rebates, pay all wages and benefits to employees and independent sales representatives and pay suppliers for goods and services provided. The company’s foreign operations are not involved in the reorganization.
The Plan remains subject to approval by the U.S. Bankruptcy Court. AMTROL expects to complete the reorganization and emerge from Chapter 11 in the second quarter of this year.
AMTROL Reorganization Update
March 14, 2007