Mercerville, NJ, Ma. 18--Congoleum is seeking bondholders' approval of certain amendments to the indenture governing its 8 5/8% senior notes due in 2008 as part of its strategy to resolve its asbestos liabilities. The amendments are intended to give the firm greater flexibility to proceed with certain steps and transactions in connection with its asbestos settlement negotiations. Upon successful completion of those negotiations, Congoleum will file a prepackaged plan of reorganization under Chapter 11 of the Bankruptcy Code which would incorporate the asbestos settlement and leave its bondholders, trade creditors, and other non-asbestos related claim creditors unimpaired.
Adoption of the proposed amendments to the indenture requires the consent of holders representing a majority of the aggregate principal amount of the outstanding notes as of the record date. Holders of such a majority have already provided Congoleum with written confirmation that they intend to consent to the proposed amendments.
Roger S. Marcus, chairman of the board, commented, "Our negotiations with claimants' counsel have progressed to the point where we believe we should be able to reach agreement. We have reviewed our goals and strategy with our largest bondholders under confidentiality agreements and they have given us their support and encouragement. This solicitation provides for the formalization of that support and positions us to finalize a settlement agreement with the claimants' counsel once the remaining economic and other aspects of our negotiations are concluded, which I am optimistic could occur shortly."
The solicitation is being made upon the terms and is subject to the conditions set forth in the Consent Solicitation Statement dated March 17 and related documents. Copies of those documents can be obtained by contacting The Altman Group, Inc., the consent agent for the consent solicitation, at (212) 681-9600. The expiration date for the consent solicitation is 3 p.m., New York City time, on Thursday, March 27, unless extended by Congoleum.
