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WestPoint Stevens auction won by Icahn group for $703 million
By Caroline Salls
Pittsburgh, June 24 - WestPoint Stevens Inc. entered into a $703 million asset purchase agreement with Textile Co., Inc. as the high bidder following a Thursday auction for the sale of its assets, according to a filing with the Securities and Exchange Commission.
Textile was acting on behalf of Carl Icahn's American Real Estate Holding LP, the filing said. A group of WL Ross & Co. and first lien lenders also bid.
Under the agreement, Textile will pay $703 million, including $187 million for the direct purchase by Textile parent American Real Estate Holding LP of 17.5% of the newly issued shares of the company.
The first-lien lenders will receive 35% of the new company's shares and the first-lien lenders and second-lien lenders will receive the right to acquire up to an additional 47.5% of the shares for $125 million.
Also under the agreement, the purchase price will include payment in full of all outstanding debt under WestPoint's debtor-in-possession credit agreement, the satisfaction of all other secured claims, the assumption of other liabilities and payment of $3 million in wind-down costs.
The agreement is subject to approval by the U.S. Bankruptcy Court for the Southern District of New York, which WestPoint was expected to request on Friday.
In March, the company's previous sale agreement with an investor group led by WL Ross & Co. LLC was terminated, and in April the court ruled that the new auction would be conducted without a stalking horse bidder.
WestPoint Stevens, a West Point, Ga.-based textile company, filed for bankruptcy on June 1, 2003. Its Chapter 11 case number is 03-13532.
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