International Aluminum files bankruptcy to restructure loan debt

By Caroline Salls

Pittsburgh, Jan. 5 - International Aluminum Corp. made a pre-packaged Chapter 11 bankruptcy filing on Monday in the U.S. Bankruptcy Court for the District of Delaware after entering into a restructuring agreement with holders of about 72% of its senior debt, according to a company news release.

The company said the goal of the restructuring agreement is to significantly reduce its debt and other guaranteed obligations, allowing it to maximize its product offerings, customer experience and profitability for long-term success.

International Aluminum's Canadian subsidiaries are not included in the Chapter 11 filing.

"International Aluminum Corporation is a strong and viable company," chief executive officer Dick Almy said in the release.

"We are securing the company's long-term future by taking this decisive action to restructure our debt and strengthen our balance sheet.

"We believe that through this process the company will emerge stronger, more competitive, and unburdened by debt, allowing for future growth."

According to the release, International Aluminum is in a very strong cash position, allowing it to continue to support its day-to-day and ongoing operations, including paying vendors and suppliers for goods and services provided after the Chapter 11 case filings.

In connection with the bankruptcy filing, the company requested court approval to use the cash collateral of its pre-bankruptcy lenders to fund its operations while in bankruptcy.

"Like many other manufacturing companies in the United States, the protracted recession has had a dramatic impact on our ability to manage debt costs and comply with our debt guidelines," Almy said in the release.

"But International Aluminum is resolute and committed to the future, and we believe that this restructuring will ultimately benefit our customers, business partners and employees."

The company said its proposed reorganization plan provides for payment in full of all pre-Chapter 11 vendor and supplier claims.

Plan creditor treatment

Specific treatment of creditors will include:

• Holders of priority non-tax claims will be paid in full in cash;

• Holders of credit agreement claims will recover 72.5% to 82% through a share of excess cash, a share of $38 million in new term notes and a share of 100% of the new equity in the reorganized company. The new term loans will mature in 2015 and bear interest at Libor plus 425 basis points, with a floor of 2.5%, plus 3.25% paid-in-kind interest;

• Holders of other secured claims will recover 100% through either payment in the ordinary course of business or transfer of the collateral securing the claim;

• Holders of notes claims and equity interests will receive no distribution;

• Holders of general unsecured claims will recover 100% through payment in the ordinary course of business; and

• Intercompany claims will either be reinstated, or adjusted, waived, continued or capitalized.

Debt details

According to court documents, International Aluminum had $198.03 million in assets and $216.92 million in debt at Nov. 30.

The company's largest unsecured creditors are:

• Carlyle Mezzanine Partners, LP, based in Miami, with a $22.32 million unsecured notes claim;

• Nylim Mezzanine Partners II, LP of Miami, with a $10.15 million unsecured notes claim;

• AEA Mezzanine Fund, LP of Miami, with a $9.6 million unsecured notes claim;

• AEA Mezzanine Fund (Unleveraged), LP of Miami, with a $3.05 million unsecured notes claim;

• Nylim Mezzanine Partners II Parallel Fund, LP of Miami, with a $2.5 million unsecured notes claim; and

• Carlyle Capital Corp. Ltd. of Miami, with a $2.48 million unsecured notes claim.

International Aluminum is a building products manufacturer based in Monterey Park, Calif. Its Chapter 11 case number is 10-10003.

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