TORONTO (Reuters) – Arclin, a closely held maker of resins and other construction-related materials, said on Monday it filed for bankruptcy protection in Canada and the United States and that it reached an agreement in principle to restructure its debt with some of its key lenders.
Under the terms of the agreement, Arclin will have its debt reduced to $60 million from $234 million, the company said in a statement.
A post-petition financing facility of $25 million is also part of the deal.
“Our current capital structure was put in place in 2007, under a different economic climate and at the top of the last business cycle,” said Claudio D’Ambrosio, Arclin’s president and chief executive.
“Having reviewed the options available, we determined that the court-supervised restructuring proceedings will accelerate – and finalize – our financial restructuring and that this is the best course of action for Arclin.”
The company said that while able to maintain a positive operating EBITDA (earnings before interest, taxes, depreciation and amortization) in 2009, weakness in its core markets reduced its cash flow and its ability to comply with certain covenants under its debt obligations.
The Mississauga, Ontario-based company said it will continue to meet its obligations to it customers, suppliers and employees while it restructuring.
Arclin said its subsidiaries in Mexico are not included in the filings. ($1=$1.08 Canadian) (Reporting by John McCrank; Editing by Frank McGurty)