Panolam Industries, a Shelton, Conn.-based decorative laminate company, has filed for Chapter 11 bankruptcy protection, as part of a previously announced debt restructuring agreement with lenders led by Apollo Capital Management and Eaton Vance Management. Genstar Capital and Sterling Group bought Panolam for $345 million in 2005.
Panolam Industries International, Inc. (the “Company”) today announced that it and its U.S. affiliates, including its parent, Panolam Holdings Co., have commenced a voluntary prepackaged proceeding under Chapter 11 of the Bankruptcy Code in the U.S. Bankruptcy Court for the District of Delaware. The Company’s non-U.S. operation, which is legally separate, is not included in the Chapter 11 filing. During this process and with the Bankruptcy Court’s approval, the Company will continue to operate in the ordinary course of business, which means that the Company will honor all obligations to its customers, vendors, suppliers and employees.
The Company previously announced that it had entered into a consensual Restructuring Support Agreement with holders of a supermajority of the principal amount of its senior subordinated notes, led by Apollo Capital Management and Eaton Vance Management, holders of a supermajority of its senior debt, and Credit Suisse, the agent for such senior lenders. The restructuring will significantly reduce the Company’s outstanding debt, and put the Company in a stronger financial position for the future. The restructuring will enable the Company to reduce the amount of debt on its balance sheet by approximately $151 million (or approximately 44%), which will eliminate approximately $16 million in annual cash interest payments on its senior subordinated notes.
The Company launched a formal solicitation of votes for the prepackaged plan of reorganization (the “Prepackaged Plan”) from its creditors on October 2, 2009, and has received far in excess of the requisite amount and number of votes needed to accept the Prepackaged Plan. The Company does not anticipate any delays in obtaining Bankruptcy Court approval of the Prepackaged Plan and expects that the Prepackaged Plan will be confirmed before the end of the 2009 calendar year.
This press release is also available within the “News About Panolam” section of the Company’s website at www.panolam.com.
Panolam Industries International, Inc. is a market leader and innovator in the decorative laminate industry. The Company’s products, which are marketed under the widely recognized Panolam®, Pionite®, Nevamar®, and Pluswood® brand names, are used in a wide variety of residential and commercial indoor surfacing applications, including kitchen and bath cabinets, furniture, store fixtures, case goods, and other applications. The Company also markets other decorative laminates including FRL, a fiber reinforced laminate product. In addition to decorative laminates, the Company manufactures and distributes industrial laminate products, including Conolite and Panolam FRP, a fiber reinforced product. The Company also produces and markets a selection of specialty resins for industrial uses, such as powdered paint, adhesives and melamine resins for decorative laminate production, custom treated and chemically prepared decorative overlay papers for the high pressure laminates, or HPL, and thermally-fused melamine, or TFM, industries, and a variety of other industrial laminate products such as aircraft cargo liners and bowling lanes.