Linwood, Pennsylvania - Foamex International Inc has commenced its previously announced rights offering, as well as a second lien loan offering, and has reduced debt by $100 million, the company announced 25 June.
Foamex said in the statement that in connection with the offerings, "the company has sold $100 million of the company's common stock at $0.65 per share pursuant to the previously announced put option to certain stockholders. The purchase price for such shares was paid by assignment to the company of second lien loans. Pursuant to the terms of the put option, the company also issued 12.8 million shares to these stockholders as a put option premium."
In the rights offering, Foamex is distributing one share to each holder of common stock, at no charge, as of 20 June. Each right entitles the holder to purchase 7.132 shares of Foamex common stock at $0.65 per share.
In the second lien offering, second lien loan lenders may acquire the company's common stock at $0.65 per share using their second lien loans at par value.
The offering materials are expected to be mailed to eligible stockholders on or about 26 June 2008, the company said.