Middleton, UK -- The Vita Group said 22 April that the UK High Court has sanctioned restructuring of the group's long-term financing and capital structure through an injection of funds from its major sponsor, TPG (Texas Pacific Group), and certain members of its existing lender group. The restructuring is expected to be completed in a few days, Vita added.
As a result of the restructuring, the group's existing syndicated debt will be materially reduced to about Euro 100 million ($129.5 million), in a debt-for-equity swap, "significantly strengthening the balance sheet," the group said.
Major polyurethane foamer Vita also said that it will have Euro 95 million of new money available, which will substantially increase the group's working capital. "As a result, Vita will become a much stronger business with a robust capital structure and sufficient liquidity to meet the challenges of the current economic climate and beyond," said the group's announcement.
"Today marks the conclusion of a complex process which will give Vita one of the strongest balance sheets in the polymer industry, and sufficient financial resources to work through the current environment," said Vita Group ceo Joe Menendez, in the company statement.
Vita had earlier announced workforce cuts which reduced its employee count to 5000, as it struggled to meet debt repayments in the current difficult economic climate. A report at the time in Crain's Manchester Business put Vita's debt at Euro 633 million.
Vita's flexible foam business is dependent on sales of mattresses and furniture, the types of consumer goods that are not being bought during the recession.
As well as flexible polyurethane foam, the 60-year-old Vita Group manufactures plastics and non-wovens. Its materials are used in industries including automotive, construction, filtration and packaging, for markets such as transport, furniture and bedding and medical products.
It has close to 80 sites in 20 countries and claims to be the leader in flexible polyurethane foam (cellular polymers) in both Western and eastern Europe, in engineered thermoplastic sheet in Europe, in hygiene non-wovens (for example for nappies) in Europe and in fire-resistant non-woven mattress layers in the US.