NEW YORK (Reuters) – Atrium Cos Inc., a maker of windows and patio doors, said on Wednesday it filed for Chapter 11 bankruptcy after reaching agreement with lenders to cut its debt through a prearranged restructuring plan.
Two-thirds of Atrium’s senior secured lenders have agreed on a plan to cut debt by more than $350 million or over 50 percent, the company said in a statement. It expects to complete the restructuring in three to four months.
“We already have the support of an overwhelming number of our senior secured lenders, so we expect to be able to move through the court process relatively quickly and efficiently,” said Gregory Faherty, president and chief executive officer, in a statement.
Atrium, which makes residential window and door products for builders, contractors and distributors, said it secured a commitment for $40 million in debtor-in-possession financing. The financing will help fund operations while it restructures under bankruptcy protection.
The company has already filed a proposed plan of reorganization and disclosure statement. Under the proposal, which is subject to bankruptcy court approval, Atrium will receive a $125 million new equity investment from majority equity owner Kenner & Co Inc and co-investor Golden Gate Capital.
Kenner and Golden Gate will receive equity in the reorganized company, as well as a refinancing of the senior secured debt.
“As part of the restructuring announced today, we will put in place a healthier capital structure that is more appropriate to the current size of the market, while freeing up additional cash that can be invested in future growth as the housing market rebounds,” said Faherty.
Atrium filed for bankruptcy in the U.S. Bankruptcy Court for the District of Delaware under the name Atrium Corp.
It plans to operate as usual and existing management will remain. The company does not expect layoffs or facility closings and will pay suppliers and wages under existing terms.
The company’s Canadian subsidiary has also initiated reorganization proceedings under the Companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice in Toronto.
Kirkland & Ellis is U.S. legal counsel, while Moelis & Co. is serving as financial adviser.
The case is In re Atrium Corp, US Bankruptcy Court, District of Delaware, No. 10-10150. (Reporting by Chelsea Emery, editing by Gerald E. McCormick)
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