Linwood, Pennsylvania-Foamex International Inc. announced 2 Feb that its plan for exiting Chapter 11 bankruptcy protection has been approved by the US Bankruptcy Court for Delaware. The major US manufacturer of polyurethane foam products expects to be trading normally again starting 12 Feb 2007.
"In confirming the plan, the court determined that Foamex had provided fair and equitable treatment of its creditors and equityholders and otherwise satisfied the confirmation requirements under the Bankruptcy Code," a Foamex statement said.
Under Foamex's plan, all holders of allowed claims will be paid in full. Also, Foamex equityholders will retain their interests in Foamex-although these will be diluted since additional common stock has been issued.
Expressing Foamex's pleasure at the court decision, Raymond Mabus, chairman and chief executive officer, said: "Today's announcement represents a significant, and almost final, milestone in Foamex's chapter 11 case." Mabus noted that Foamex expects to "emerge as a stronger, more competitive company that is better able to compete in the marketplace, invest in our operations and R&D efforts, and provide our customers with the innovative solutions they need."
Foamex has up to $790 million of exit financing from a group of lenders led by Bank of America, NA and Banc of America Securities llc, from which it will draw about $615 million as it gets out of chapter 11.
The exit financing will be used by Foamex to repay the debtor-in-possession facility, to make other payments required upon exit from bankruptcy, and to ensure strong cash balances to conduct post-reorganisation operations.
Foamex said that creditor payments are likely to start on 12 Feb."