Oglebay Norton Co. to Complete Restructuring Within Chapter 11
February 23 2004 - 6:12AM
PR Newswire (US)
Oglebay Norton Co. to Complete Restructuring Within Chapter 11
Operations continue uninterrupted; Company secures $75 million
debtor-in- possession financing; Progress made on financial
restructuring plan CLEVELAND, Feb. 23 /PRNewswire-FirstCall/
--Oglebay Norton Company said today that the Company and its wholly
owned subsidiaries* have filed voluntary petitions under chapter 11
of the U.S. Bankruptcy Code in the United States Bankruptcy Court
for the District of Delaware. As previously disclosed, the Company
has been engaged in discussions with holders of its Senior
Subordinated Notes. The Company said that just prior to filing it
reached an agreement in principle with a majority of holders of its
Senior Subordinated Notes to exchange theirnotes for equity. The
agreement also contemplates having them make an investment of new
equity. Further, the Company said it has made substantial progress
towards obtaining a new credit facility that would retire its
existing bank debt. The Company said it believes these events will
enable it to pursue a process to emerge from chapter 11 on an
expedited basis. Oglebay Norton President and Chief Executive
Officer Michael D. Lundin said, "For months we have been engaged in
discussions to determine thebest way to restructure while
preserving the greatest value for all stakeholders. We ultimately
concluded that it was not possible to adequately restructure our
long-term debt outside of court protection. Filing for chapter 11
became the only viable option to complete the restructuring plan
and preserve the value of the businesses." He added, "We intend to
continue operations without interruption and fulfill our
commitments to our employees, retirees and customers during the
reorganization process. Our goal is to emerge from court protection
as rapidly as possible with a new capital structure that will
enable us to move forward on our strategic plan for the Company."
The Company also announced that it is seeking immediate interim
bankruptcy court approval of a $75 million debtor-in-possession
(DIP) credit facility from a syndicate led by Silver Point Finance.
The syndicate also includes other members of the Company's
pre-petition bank group. The DIP facility, together with funds from
operations, is expected to provide the liquidity necessary to
enable the Company to meet its obligations to its suppliers,
customers and employees during the chapter 11 reorganization
process. While the Company is in chapter 11, investments in its
securities will be highly speculative. Shares of the Company's
common stock will likely have little or no value, and it is
anticipated that Company shares may be delisted from trading on the
NASDAQ National Market. Strategic operating plan in place Lundin
said the Company intends to continue to pursue the strategic
operating plan it put in place over the last two years but has been
unable to execute fully due to the financial issues it has faced.
"The strategic operating plan is based on our core competencies
ofextracting, processing and providing minerals," Lundin said. "As
we have said before, our plan is to expand our current markets and
develop new ones for our limestone and fillers groups while
maximizing the profitability of our sand, lime and marine units. We
are confident in our ability to implement this strategy and return
Oglebay Norton to sustained profitable growth." Commenting on
previously announced plans to sell the Company's mica and lime
operations, Lundin said management is in active discussions to sell
the mica operations. However, he said the Company has chosen to
cease its efforts to sell its lime operations as nearly all of the
potential new equity investors and new lenders have indicated that
they want the Company to retain the lime business. Factors leading
to the filing Beginning in 1998, Oglebay Norton incurred
significant debt in connection with a series of acquisitions. These
acquisitions, which transitioned Oglebay Norton into a diversified
industrial minerals company, also resulted in a highly leveraged
balance sheet. When the U.S. economy slipped into recession in
2001, the debt became an increasing financial burden. Over the past
three years, the Company has been impacted particularly by the
decline of the nation's integrated steel industry, rising energy
costs and adverse market conditions in commercial and residential
building materials. Together, these factors resulted in decreased
demand for limestone and mica from the Company's quarries and for
the services ofits Great Lakes fleet. Despite ongoing efforts to
cut costs, the Company suffered operating losses of $18.8 million
in 2001, $6.6 million in 2002, and $31 million in 2003. The
continuing losses aggravated the already significant debt load. As
of December 31, 2003, the Company had approximately $422 million in
outstanding funded debt on 2003 sales and operating revenues of
$404 million. "We had hoped to achieve an out-of-court financial
restructuring, but even with the best efforts of all parties, that
proved impossible to do," said Lundin. "We now must complete the
process under court protection. "It is important to remember that
we have solid businesses, longstanding customer relationships, and
high-quality, proven long-life reserves. We compete in markets
where we have attractive opportunities and limited competition. We
have a strategic marketing vision, focus and plan that complement
our restructuring efforts. We understand our businesses and their
cycles. We have structured our sales force to match our people's
skills with our business objectives. With the support of our
customers, suppliers, lenders and employees, we are committed to
repositioning a reorganized Oglebay Norton in the marketplace and
returning it to sustained profitability." Additional information
about the filing for creditors and other parties will be available
through a link on the Company website,
http://www.oglebaynorton.com/ . Oglebay Norton Company, a
Cleveland, Ohio-based company, provides essential minerals and
aggregates to a broad range of markets, from building materials and
home improvement to the environmental, energy and metallurgical
industries. The Company has approximately 1,770 full-time and
part-time hourly and salaried employees in 13 states. *The Oglebay
Norton Company wholly owned subsidiaries that have filed voluntary
petitions under chapter 11 of the U.S. Bankruptcy Code are: ONCO
Investment Company; Oglebay Norton Company; Erie Navigation
Company; Erie Sand Steamship Company; Erie Sandand Gravel Company;
GS Lime Company; GS PC, Inc.; Global Stone Chemstone Corporation;
Global Stone Corporation; Global Stone Filler Products, Inc.;
Global Stone James River, Inc.; Global Stone Management Company;
Global Stone PenRoc, LP; Global Stone Portage, LLC; Global Stone
St. Clair, Inc.; Global Stone Tenn Luttrell Company; Michigan
Limestone Operations, Inc.; Mountfort Terminal Ltd.; ON Marine
Services Company; ONMS Management Company, LLC; ONTEX, Inc.;
Oglebay Norton Engineered Materials, Inc.; Oglebay Norton
Industrial Sands, Inc.; Oglebay Norton Management Company; Oglebay
Norton Marine Management Company, L.L.C.; Oglebay Norton Marine
Services Company, L.L.C.; Oglebay Norton Minerals, Inc.; Oglebay
Norton Specialty Minerals, Inc.; OglebayNorton Terminals, Inc.; On
Coast Petroleum Company; Onco WVA, Inc.; Saginaw Mining Company;
Texas Mining, LP. Safe Harbor Certain statements contained in this
release are "forward-looking" in that they reflect management's
expectations and beliefs regarding the future performance of the
Company and its operating segments. Forward-looking statements are
necessarily subject to risks, uncertainties and other factors, many
of which are outside the control of the Company, which could cause
actual results to differ materially from such statements. The
outcome of the chapter 11 restructuring case is uncertain and
subject to substantial risk. There can be no assurance that the
Company will be successful in achieving its financial
reorganization. Weather,particularly in the Great Lakes region,
water levels, energy, fuel and oil prices, steel production,
changes in the demand for the Company's products due to changes in
technology, Great Lakes and Mid-Atlantic construction activity, the
California economy and population growth rates in the Southwestern
United States, the outcome of negotiations of labor agreements, the
loss or bankruptcy of major customers or insurers, changes in
environmental law, and changes in asbestos or silica product
liability litigation filed in the United States and determinations
by a court or jury against the Company's interest all can impact
revenues and earnings. Some of our customers have filed for
reorganization under chapter 11 of the U.S. Bankruptcy Code. Please
refer to the Company's current and subsequent SEC filings under the
Securities and Exchange Act of 1934, as amended, for further
information. For Further Information Contact: Julie A. Boland Vice
President, Chief Financial Officer and Treasurer Oglebay Norton
216-861-8941 DATASOURCE: Oglebay Norton Company CONTACT: Patrick
Gallagher or Stephen Phillips of Edward Howard & Co.,
+1-216-781-2400 Web site: http://www.oglebaynorton.com/
Copyright
Oglebay Norton (NASDAQ:OGLE)
Historical Stock Chart
From Jun 2024 to Jul 2024
Oglebay Norton (NASDAQ:OGLE)
Historical Stock Chart
From Jul 2023 to Jul 2024