Anchor Glass files plan of reorganization to erase $50 million of debt

By Sara Rosenberg

New York, April 15 - Anchor Glass Container Corp. filed a prepackaged plan of reorganization, which calls for the eradication of $50 million of debt, in the U.S. Bankruptcy Court for the Middle District of Florida, Tampa Division. The restructuring plan is subject to court approval.

Under this plan, secured bond holders will retain their $150 million of outstanding first mortgage notes and receive a consent fee for a waiver of the change-of-control provisions and other non-financial changes to the terms of the notes, a company press release said. Additionally, the company has signed lock-up and support agreements with unsecured bondholders, who will receive $50 million in cash and with a majority of Series A preferred stock holders, who will receive $22.5 million. All Series B preferred stock and common stock will be canceled.

"The action allows Anchor Glass to re-capitalize and provides us with a more stable financial base for the future," said Richard M. Deneau, president and chief operating officer of Anchor Glass.

In mid-March Cerberus Capital Management LP agreed to give the company $100 million in new capital. In the agreement, the replacement of Anchor's credit facility with a new $100 million loan is being considered.

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