Walter Industries to use at least 50% of proceeds from asset sale to pay down bank debt

By Sara Rosenberg

New York, Oct. 31 - Walter Industries Inc. plans to use at least 50% of the proceeds from the sale of JW Aluminum Co. to repay outstanding debt under its credit facility, a company spokesman told Prospect News, adding that the pay down is required under the covenants contained in the credit agreement.

"We're undecided what the other 50% will be used for," the spokesman added.

After market hours Thursday, the company announced that it has entered into a definitive agreement to sell JW Aluminum to Wellspring Capital Management LLC for $125 million. The transaction is expected to close in the fourth quarter.

"While JW Aluminum has been a strong performer for Walter Industries, it does not fit our long-term strategy of reducing the complexity of the corporation," said Don DeFosset, chairman and chief executive officer, in a news release. "This divestiture, along with the pending divestiture of our Aimcor subsidiary, is a significant step towards focusing the company on our core businesses of Homebuilding, Financing and U.S. Pipe."

Walter Industries is a Tampa, Fla. diversified company involved in homebuilding, home financing and water transmission products.

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