WKI Holding receives interim court approval to use $25 million of its DIP

By Sara Rosenberg

New York, May 31 - WKI Holding Co., which operates mainly through World Kitchen Inc., said it received court approval on all "critical" first day motions made as part of its Chapter 11 filing. In addition, the company was granted interim approval to access up to $25 million of its debtor-in-possession financing.

The DIP allows for up to $75 million in financing and was committed by a bank group led by JPMorgan Chase Bank. A final hearing is scheduled for June 21, at which time the company will seek permission to access the entire $75 million, the release said.

The financial restructuring is anticipated to reduce WKI's funded debt by approximately $440 million to $373 million from $812 million, increasing financial flexibility. Under the restructuring, the bank group will convert $189 million of debt into equity, an affiliated lender of the company's $25 million credit facility will convert the loan into equity and $200 million of senior subordinated bondholders' claims will be converted into equity, according to the release.

The terms of the financial restructuring have been agreed upon by a steering committee for its bank group and a group of affiliated parties. JPMorgan Chase Bank is a member of the bank steering committee and is administrative agent for the company's existing credit facility. The affiliated parties consists of the company's primary shareholder and largest bondholder, with 40% of the company's outstanding senior subordinated bonds. Due to the support of parties holding more than 80% of funded debt, the company expects to emerge from bankruptcy "on an expedited timeline," the release said.

"The first day of our chapter 11 proceeding was very productive. We are gratified that Judge Schmetterer approved our critical first-day motions, which will enable us to transition into chapter 11 with minimal disruption and to maintain normal operations throughout the process," said Steven Lamb, president and chief executive officer. "Our attention will now be devoted to working with our financial constituencies to develop, finalize, seek Court approval for and implement a plan of reorganization."

WKI, based in Elmira, N.Y., produces kitchenware and tableware under such brands as Corelle, CorningWare, Pyrex, Revere, Visions, Revere, EKCO, Baker's Secret, Chicago Cutlery, Regent Sheffield, OXO and Grilla Gear.

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