Milacron files for Chapter 11, agrees to sell assets to its major investors
Equipment supplier Milacron Inc. has voluntarily filed for Chapter 11 bankruptcy protection from creditors, and h...
March 10, 2009 by Canadian Plastics
Equipment supplier Milacron Inc. has voluntarily filed for Chapter 11 bankruptcy protection from creditors, and has reached an agreement with its two major investors for a financial restructuring.
According to a company press release, Batavia, Ohio-based Milacron remains committed to continuing its operations.
The company blamed “severely reduced sales and orders in recent months – precipitated by the ongoing credit crisis and deteriorating global economic conditions.”
“The filings enable Milacron to implement the restructuring and continue to operate its business in the normal course,” the company said.
Under the terms, Avenue Capital and DDJ Capital Management LLC – which hold 78 per cent of Milacron’s senior notes – will provide the company with US$80 million in debtor-in-possession financing, and will purchase substantially all of the company’s assets.
“Pursuit of these transactions is a positive step that is in the best interests of the company, our employees, customers, suppliers and other constituents,” said Dave Lawrence, Milacron president and chief executive officer. “Avenue Capital and DDJ’s continued support is indicative of their faith in Milacron’s brands, products and people, each helping to create value in the marketplace. This process will allow the business to withstand current economic conditions as part of a new enterprise with a healthy balance sheet.”
The agreement is subject to terms including bankruptcy court approval, and Milacron will solicit competing bids from other potential purchasers.