Warren, NJ, Jan. 14--Formica Corporation today announced that the United States Bankruptcy Court for the Southern District of New York confirmed the company's Plan of Reorganization (the Plan). Formica expects the Plan to become effective shortly and remains on target to emerge from Chapter 11 before the end of the first quarter of 2004.
"Today's action by the Court represents a major milestone in Formica's recovery and clears the path to emergence from Chapter 11," said Frank A. Riddick, III, President and Executive Officer of Formica. "During the course of the Chapter 11 case, we consistently emphasized that Formica's reorganization was a balance-sheet restructuring aimed at substantially reducing its debt. During the reorganization, we were able to demonstrate our resilience with an array of innovative industry-leading new products. Now that we will soon emerge, we intend to enhance our industry leadership. We greatly appreciate the dedication of our employees and the trust and support of our customers, design community and suppliers throughout the restructuring process."
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 under which the investment group committed to invest $175 million in cash in Formica and its subsidiaries. Upon emergence, these investors will own approximately 95% of the common stock of the new parent company of Formica Corporation
Upon emergence, Formica's consolidated debt will be approximately $160 million, as compared to more than $540 million of debt at the time of the filing. Formica also announced that on the effective date of the Plan it will enter into a $65 million revolving credit facility to be provided by The Foothill Group, Inc., an affiliate of Wells Fargo Foothill, Inc.
