Burlington files Ch. 11
November 15, 2001-- Home Textiles Today,
Greensboro, NC — Burlington Industries has filed for Chapter 11 bankruptcy protection, saying it will focus on developing its Lee Carpets business and expanding global sourcing partners through its new Hong Kong subsidiary, Burlington WorldWide Limited.
The company also will pursue fabric innovation through proprietary technology developed by Nano-Tex, and will accelerate manufacturing improvements in its North American operations.
"Our business model going forward adds worldwide reach to our North American capacity to provide products, services and global solutions to our customers," said chairman and ceo George Henderson III. "We are creating a more flexible and responsive company capable of meeting the diversified and ever-changing needs of our customers."
The key factor pushing Burlington into the filing, Henderson said, "was the U.S. government's history of using the textile industry as a bargaining chip in international relations."
Burlington — the country's 8th largest home textiles producer — listed debts of $1.1 billion. Its largest creditors include: DuPont, $9.1 million; Unifi, $1.5 million; Kosa, $1.2 million; Ciba Specialty Chemical, $765,857.65; and Carolina Mills, $693,512.
JP Morgan Chase has underwritten up to $190 million in debtor-in-possession financing, subject to bankruptcy court approval.
Burlington said it expects to generate positive cash flow in 2002.
"We currently have good liquidity," said Henderson. "As a result of our working capital and operational improvements achieved during the year, we currently have approximately $50 million cash on hand."
Also today, the company reported a net loss of $91.1 million for the fiscal year ended Sept. 29, vs. a loss of $527.0 million last year. Sales were $1.4 billion, down 12.5 percent from $1.6 billion the previous year. The company noted that nearly $139 million of the sales reduction related to businesses sold or closed in 2001.
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