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Wellman changes treatment for first-, second-lien debtholders; Sola to sponsor plan
By Caroline Salls
Pittsburgh, Dec. 23 - Wellman, Inc. has made a few "minor changes" to its plan of reorganization and related disclosure statement, according to a company news release.
Specifically, Wellman said its first-lien and second-lien debtholders will now receive third-lien convertible notes in exchange for their claims. The notes can be converted into 50% of reorganized Wellman.
In addition, plan sponsor Sola Ltd. will provide the company with $35 million in cash in exchange for $40 million of second-lien convertible notes, which can also be converted into 50% of reorganized Wellman.
Under the original plan, the company's first-lien and second-lien debt was scheduled to be converted directly into equity of the reorganized company.
In addition, Wellman was originally slated to receive $90 million in cash in exchange for $120 million of convertible notes issued through a rights offering.
"Now that we have a plan that has the support of both groups of lien holders, we expect to emerge from bankruptcy as a stronger, more profitable and highly competitive company," chief executive officer Mark Ruday said in the release.
In order to give Wellman time to provide notice of the changes, the lenders under the company's debtor-in-possession facility amended the DIP agreement to give the company until Jan. 19 to obtain confirmation of the plan and Jan. 31 to emerge from bankruptcy.
The plan confirmation hearing is scheduled for Jan. 12.
"The company worked through unbelievably difficult circumstances in this bankruptcy and will emerge because all its stakeholders worked together to develop an economically viable plan that maximizes their recovery," Kirkland and Ellis partner Jonathan Henes said in the release.
Wellman, a polyester products manufacturer based in Fort Mill, S.C., filed for bankruptcy on Feb. 22, 2008. Its Chapter 11 case number is 08-10595.
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