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GSI equity committee opposes noteholder deal, may file competing plan
By Caroline Salls
Pittsburgh, March 15 - GSI Group, Inc.'s official committee of equity security holders has unanimously rejected the proposed agreement in principle between the company and its senior noteholders, according to an equity committee news release.
As with GSI's original plan, the equity committee said the proposed modified plan gives the noteholders a recovery on their claims significantly greater than what they are entitled to receive.
"After months of negotiations between the equity committee and the noteholders that resulted in substantial improvements to the recovery of the company's equity holders, rather than supporting the equity committee's efforts to obtain the highest possible recovery for equity holders, the GSI board intervened and yet again sided with the noteholders," equity committee chairman Stephen W. Bershad said in the release.
"But for the efforts of the equity committee, GSI and the noteholders would have crammed through the original plan that provided value to equity holders equivalent to a per share price of approximately $0.60 per share. Negotiations between the equity committee and noteholders have increased that recovery to a per share price of approximately $1.60 per share.
"Based on revised projections provided by the company to the equity committee, the committee believes that even the modified plan gives the noteholders too great a recovery.
"The equity committee will continue to fight to improve the recovery to equity holders further, and is prepared to challenge the modified plan in bankruptcy court and may seek to propose and solicit its own plan of reorganization."
Bedford, Mass.-based GSI makes precision motion component products, lasers and laser-based manufacturing systems. The company filed for bankruptcy on Nov. 20 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-14109.
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