True Temper Sports Inc., as expected, filed a pre-packaged Chapter 11 petition as part of a plan to reorganize its debt structure.
The filing with the U.S. Bankruptcy Court in Delaware is considered to be “a mechanism to implement the agreed upon balance sheet restructuring, and will not impact the fundamental business of True Temper or its day-to-day operations,” according to a company statement.
The company reached an agreement with its secured lenders, bondholders and shareholders to restructure all of its outstanding debt in order to reduce loan balance. The deal will reduce the company’s debt from around $275 million to less than $40 million. True Temper anticipates completing the process in the next 60 days.
In a statement, Scott Hennessy, president and CEO of True Temper, said the company had capital structure issues that needed to be addressed, which led to the filing.
“Very shortly the completion of this financial reorganization will be behind us, and we can once again put all of our focus on continuing to grow True Temper’s golf and performance sports businesses,” Hennessy said. “We fully expect to see a continued recovery in our business during the remainder of 2009 and into 2010.”
True Temper, which filed for Chapter 11 Oct. 8, brought in a new group of investors to pay off its bank loans completely, Hennessy said. The other lenders are receiving equity in the company in exchange for eliminating the company's debt to them.
The chapter petition was filed with the bankruptcy court to speed up the process, Hennessy said.
Memphis-based True Temper is a private company and employs nearly 1,000 people in 10 facilities located throughout the U.S., Europe and Asia. As well as making golf shafts, it markets golf shafts and other recreational sports products under the True Temper, Grafalloy, Royal Precision and Alpha Q brands.