Oneida to file pre-packaged Chapter 11 on March 20; lenders agree to $100 million debt-reduction plan

By Caroline Salls

Pittsburgh, March 9 - Oneida Ltd. will make a pre-packaged Chapter 11 filing on March 20 that reflects an agreement with its lenders to reduce debt by about $100 million, according to a company news release.

President and chief executive officer Terry G. Westbrook said in the release that the company is burdened by "an unmanageable debt load."

According to the release, financial institutions representing 100% of the company's outstanding tranche B debt and 94% of the company's outstanding tranche A debt have agreed to the recapitalization plan and entered into a plan support agreement.

Oneida said it expects to exit Chapter 11 about 90 days after filing.

Under the pre-packaged plan, all of the company's common stock will be issued to the holders of its tranche B debt.

The company's $115 million tranche A term loan will be refinanced with a long-term revolving credit and term loan facility from Credit Suisse.

All of Oneida's existing common and preferred stock will be cancelled and holders will receive no recovery.

Oneida has obtained commitments from a lending syndicate led by JP Morgan Chase Bank, NA to provide up to $40 million of revolving debtor-in-possession credit.

In addition, a lending group led by Credit Suisse has agreed to provide up to $170 million of long-term exit financing, which will include an $80 million asset-based five-year revolving credit facility and a $90 million six-year term loan.

Oneida said its working capital and liquidity positions remain strong and are expected to remain so during the brief reorganization process.

The company's non-U.S. affiliates will not be included in the Chapter 11 filing.

"The recapitalization now underway is intended to improve our capital structure, which in turn will facilitate our continued progress and growth," Westbrook said in the release.

Oneida said that in the past 16 months, its board of directors has appointed a new CEO, executive vice president of worldwide sales and marketing and chief financial officer; reduced operating, product and administrative costs; created a global procurement team to manage its extensive network of contract manufacturers in Asia; opened a West Coast distribution center to improve supply-chain efficiency and customer service and developed a strategic marketing plan to drive growth in the company's consumer and food service franchises.

Oneida, based in Oneida, N.Y., makes flatware, dinnerware, crystal and metal serving pieces for consumers and the food services industry.

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