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Chart Industries in talks with lenders to cure defaults; accountants to issue "going concern" warning
By Sara Rosenberg
New York, April 1 - Chart Industries Inc. is currently in default under its credit facility and incremental credit facility and is therefore involved in negotiations with senior lenders regarding amending the facilities, waiving the defaults and reducing leverage by restructuring the facilities.
As a result of the defaults, the $256.9 million of senior debt is classified as a current liability, which results in a working capital deficiency, leading the company's independent accountants to issue a "going concern" qualification.
The negotiations may result in an exchange of a portion of the senior debt for a substantial equity ownership position in the company and substantial dilution of current shareholders' ownership interests in the company, according to a news release.
However, if the company does not successfully restructure its debt, it may be required to pursue other restructuring alternatives.
"During the first quarter of 2003, a substantial percentage of the company's debt was sold by the original lenders to new investors," said Arthur S. Holmes, chairman and chief executive officer, in the release. "These changes in the composition of the senior lender group have complicated our debt restructuring negotiations and have contributed to delays in the process. I am hopeful that the company will be able to reach a timely agreement with the lenders that will satisfy all constituents."
Chart Industries is a Cleveland manufacturer of standard and custom-built industrial process equipment primarily used for low-temperature and cryogenic applications.
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