Wellman Files Ch. 11, Receives DIP Financing
March 10, 2008-- Home Textiles Today,
Polyester resin and fiber manufacturer Wellman, Inc. has filed for Chapter 11 bankruptcy in the Southern District of New York; the company received a commitment from existing 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." He said Chapter 11 will help the company operate without interruption while pursuing its "strategic alternative process."
Duff was referring to Wellman's October 2007 hiring of Lazard Freres & Co. to explore options. Since then, the $1.3 billion company decided to not issue a fourth quarter dividend, and also was delisted from the NYSE and moved to the OTC trading market.
Through the first three quarters of 2007, Wellman reported a loss of $66.1 million, compared to a loss of $68.7 million in the year-ago period.
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