PET resin maker Wellman, Inc. has completed an amendment to its DIP agreement that will allow it to pursue a stand-alone plan of reorganization in U.S. Bankruptcy Court. The amended agreement requires that the company adhere to the following timetable in completing its plan of reorganization:
- File, with the Bankruptcy Court, by June 25, 2008, (i) a plan of reorganization, (ii) a disclosure statement and (iii) a commitment of at least $70 million to backstop a rights offering which is reasonably acceptable to the DIP lenders,
- Obtain an indicative commitment for exit financing by July 14, 2008,
- Obtain a fully underwritten commitment for exit financing by July 30, 2008,
- Obtain Bankruptcy Court approval of the disclosure statement by August 4, 2008,
- Obtain an order confirming the plan of reorganization by September 15, 2008, and
- Complete the plan of reorganization and exit bankruptcy by September 25, 2008.
Wellman has reached an understanding with the two largest holders of its second-lien debt to backstop an $80 million rights offering. This commitment is expected to be finalized before June 25, 2008. The company has also made significant progress on the other elements of the plan of reorganization, but said it could not offer any assurances that it will be able to complete the plan of reorganization.
“We look forward to working with the backstop parties and our other stakeholders to complete the plan of reorganization and emerge from bankruptcy with a strong financial position,” said Mark Ruday, Wellman's CEO. This will allow us to capture more profitable growth opportunities in PET resins as well as in our other businesses.”
