Haynes International files for Chapter 11, noteholders to get 96% of equity

By Jeff Pines

Washington, March 29 - Haynes International, Inc. said it filed for protection under Chapter 11 and that under an agreement in principle its note holders would get 96% of the reorganized company.

Haynes, based in Kokomo, Ind., has $140 million outstanding of 11 5/8% senior notes due Sept. 1, 2004. Haynes is privately held and the majority shareholder has agreed to the deal for a 4% stake in the reorganized company, it said.

In November, the company retained advisors to help it with a restructuring, according to a Securities and Exchange Commission filing.

A reorganization plan and disclosure statement should be filed in the next few weeks with the U.S. Bankruptcy Court for the Southern District of Indiana, the company said.

Haynes said it intends to repay all allowed pre-petition vendor claims in full.

For financing, the company has turned to Congress Financial Corp., which will provide a $100 million debtor-in-possession credit facility. Congress also has agreed to provide the company with financing when it emerges from Chapter 11. The increased financing will provide Haynes with sufficient liquidity to finance its growth during the next three years, the company said.

Haynes had $180.1 million in assets and $353.0 million in liabilities as of Sept. 30, 2003, according to its most recent 10-Q filing with the Securities and Exchange Commission.

Haynes develops, manufactures and markets alloys used in the aerospace and chemical processing industries.

Its Chapter 11 case number is 04-05364.

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