Georgia Gulf noteholders agree to withdraw default notice; company to seek amendment consents

By Caroline Salls

Pittsburgh, July 15 - Georgia Gulf Corp. has entered into a settlement with some holders of its 7 1/8% senior notes due 2013 under which the noteholders have agreed to withdraw a notice of default, according to an 8-K filed with the Securities and Exchange Commission.

In addition, the company and the noteholders have agreed to file for dismissal of a related lawsuit.

Georgia Gulf will pay $1.4 million of the noteholders' legal fees under the settlement.

The company said it will also solicit consents of a related indenture amendment from all 7 1/8% noteholders, and Georgia Gulf will pay a $1.5 million fee to the consenting noteholders.

Georgia Gulf said the amendment will modify covenants included in the indenture and provide a waiver of any defaults.

The noteholders who signed the settlement agreement and one additional noteholder, who together own a majority in principal amount of the notes, have already delivered consents.

Payment of the consent fee and the indenture amendment is also subject to approval of the lenders under the company's bank credit agreement.

As previously reported, on June 9, the company received a notice from holders of at least 25% of the notes that claims that borrowings under Georgia Gulf's senior credit facility resulted in the incurrence of debt obligations in excess of the amount allowed under the notes indenture.

Atlanta-based Georgia Gulf manufactures chlorovinyls, aromatics and vinyl-based building and home improvement products.

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