Formica Receives Court Approval Of Disclosure Stat
Warren, NJ, Nov. 19--Formica Corporation today announced that the United States Bankruptcy Court for the Southern District of New York issued an order approving the Disclosure Statement with respect to its Plan of Reorganization (the Plan). The Court's action indicates that Formica's Disclosure Statement contains adequate information for parties in interest to vote on the Plan. Previously, on October 29, the Court had conditionally approved the Disclosure Statement with the understanding that the company would soon resolve matters pertaining to its exit financing.
Formica will now begin soliciting acceptances for its proposed Plan of Reorganization. The confirmation hearing for the Court's approval of the Plan is scheduled for January 13, 2004. The company also reported that it has executed a term sheet so that it will have access to $65 million once the Plan is confirmed and effective. The exit financing is to be provided by The Foothill Group, Inc., an affiliate of Wells Fargo Foothill, Inc.
On July 1, 2003, the Court approved the Stock Purchase Agreement with an investment group sponsored by Cerberus Capital Management L.P. and Oaktree Capital Management LLC pursuant to which the investment group committed to invest $175 million in cash in Formica and its subsidiaries.
Formica's Plan incorporates an agreement as to the terms of a consensual reorganization reached with a Steering Committee for its senior secured lenders and its Official Committee of unsecured creditors.
"The Court's acceptance of our Disclosure Statement put us in the homestretch of the financial restructuring process and gives us confidence that our successful emergence from chapter 11 is on track," said Frank A. Riddick, III, Formica's President and Chief Executive Officer. "We have worked closely with our investors, principal creditor groups and the banks to develop the Plan so that at emergence our consolidated debt will be approximately $160 million, as compared to more than $540 million of debt at the time of the filing. With The Foothill Group, Inc. now on board, the final piece of our financial restructuring is in place, and we are positioned to emerge from Chapter 11 during the first quarter of 2004 as a financially strengthened company and formidable competitor."
