Shrewsbury, New Jersey, June 27--Wellman Inc. which makes polyester fibers and plastic resins, said it sold a stake in the company to a private investor after the plan won shareholder approval and it secured a credit line.
Under terms of the deal, first proposed earlier this year, Warburg Pincus bought $126 million of convertible preferred shares that pay an annual noncash divided of 8.5 percent. It gives the buyout shop a 26 percent stake in Wellman.
Warburg Pincus earlier had invested $20 million through a convertible note, which it exchanged for preferred shares.
Wellman said it would use the proceeds to pay down debt. It added that 80 percent of the company's shares voted to approve the deal on Thursday.
Another condition of the deal was met after Wellman secured a three-year, $275 million revolving credit line to replace an existing one. J.P. Morgan led the syndicate, which included Fleet National Bank, National City Bank and Bank of Nova Scotia, Wellman said.
Wellman originally planned for a $175 million credit line, but said the offer was so well received, it expanded it.
David Barr, a Warburg Pincus partner, was named to Wellman's board, which expanded to 10 members as a result.
