By Mike Boyer
The Cincinnati Enquirer

Milacron Inc. reported a wider fourth-quarter loss Wednesday and said it expects "significant dilution'' in the value of its existing shares from its unresolved debt refinancing.

The news sent shares of the 120-year-old company down 14 percent, to close at $3.16.

The company faces a March 15 deadline, when $115 million in senior bonds comes due. It is also renegotiating a revolving bank credit agreement with $42 million due at the same time and a $36 million accounts-receivable borrowing facility expiring at the end of this month.

"We continue to have discussions with both current and prospective lenders and investors'' on short- and long-term financing options, chairman Ron Brown said .

While the company declined to elaborate on its negotiations, analysts said the company appeared to be headed toward either some type of a swap of debt for equity or a Chapter 11 bankruptcy filing.

Either course would dilute the value of the existing shares.

"The big question is: Can they get the money and stay in business without Chapter 11?'' McDonald Investments analyst Walter S. Liptak said. "It's a shame because management and the founding (Geier) family hold about 20 percent of the equity. They stand to be the losers.''

Brown said the company was "absolutely committed to seeking a solution that is in the best interests of all our stakeholders.''

Joseph VonMeister, high-yield analyst with Jefferies & Co., said Milacron, which employs about 1,000 in Greater Cincinnati, appears to be considering a debt-for-equity swap.

"I think there's going to be a fight between the equity holders and the bondholders,'' he said.

But Eli Lustgarten, an equity analyst with J.B. Hanauer & Co., said it's still too difficult to evaluate because the terms of any stock-for-debt exchange aren't known.

VonMeister said stockholders might prefer that the company sell its industrial fluids business to retire the $115 million in bonds coming due, rather than see their equity diluted further with new stock.

In addition to the debt coming due now, Milacron has about $142 million in euro bonds expiring in April 2005.

In a conference call with investment analysts, Brown said the company wasn't considering selling the fluids business, which had revenues of $104 million last year.

The company is already planning to sell its grinding wheel business.

Brown said indications are the prolonged slump in its plastic-making machinery and industrial fluids businesses is ending.

In the fourth quarter, Milacron reported a net loss of $24.4 million, compared with a loss of $5.5 million a year earlier.

The latest quarter included a noncash goodwill impairment charge of $13.3 million and pre-tax restructuring charges of $8.4 million. The year-ago quarter included $6.5 million in after-tax losses from discontinued operations, $4.1 million in pre-tax restructuring charges and a $6.6 million tax benefit.

E-mail mboyer@enquirer.com