Wellman files Ch. 11, receives DIP financing
Home & Textiles Today Staff -- Home Textiles Today, February 25, 2008
Fort Mill, S.C. – Polyester resin and fiber manufacturer Wellman, Inc. has filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code for the Southern District of New York; the company received a commitment from its existing revolving credit facility lenders for up to $225 million in debtor-in-possession (DIP) financing.
Wellman chairman and ceo Thomas Duff said actions taken to reduce cost “were not sufficient to offset the deterioration in business conditions and the cost of our substantial debt obligations. Filing for Chapter 11 allows us to continue operating our business without interruption while continuing to pursue our previously announced strategic alternative process.”
Duff was referring to Wellman’s October 2007 hiring of Lazard Freres & Co. to explore strategic options. Since then, the $1.3 billion company decided to not issue a fourth-quarter dividend, was delisted from the NYSE and moved to the OTC trading market.;
Through the first three quarters of 2007, the company reported a loss of $66.1 million, compared to a loss of $68.7 million in the year-ago period. The company’s fourth-quarter results have not been released; March 7 was the date previously set for that report.
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