By Mike Boyer
The Cincinnati Enquirer

The board of directors of Milacron Inc. met in special session Thursday night to consider debt refinancing options for the 120-year-old Cincinnati-based company.

Milacron, which employs 1,000 in Greater Cincinnati, faces a Monday deadline to pay off or refinance about $200 million in bonds and bank financing. The maker of plastic molding machines and industrial fluids says it doesn't have enough cash to pay off the obligations.

The company said the board was considering a counterproposal from an ad hoc group of bondholders, which earlier rejected a company proposal. A representative of the bondholders couldn't be reached for comment. The company said its directors were also considering proposals from other potential new lenders and investors for both short- and long-term financing.

The company, which has struggled with weak sales and losses because of the prolonged slump in manufacturing, could face Chapter 11 bankruptcy reorganization if it is unable to work out a refinancing deal, analysts say.

A company spokesman Thursday said Milacron still hoped to avoid a Chapter 11 filing, but declined to provide details on the options the board was considering.

Milacron's shares, which have lost about 80 percent of their value in the last two years, closed Thursday at $2.30, down 11 cents in heavy trading.

Ken McCurdy, Milacron investor and descendent of founder Frederick A. Geier, said that since the stock didn't fall sharply Thursday, that might indicate that investors think the company can still work out a refinancing plan.

McCurdy said the company's outlook is improving with both orders and its cash position increasing.

The Geier family controls about 9 percent of Milacron's 34.8 million shares outstanding.

In reporting a narrower $192 million loss for 2003, the company said last month that its fourth-quarter sales were about $5 million above expectations and its cash on hand increased by $30 million in three months. The company has reported losses of more than $450 million over the last three years.

Bradford Svensson, president of Falcon Fabricators Inc., an Amelia sheet metal fabricator that makes control panel enclosures for Milacron's molding machines, said he was hopeful that the company would work out a refinancing plan.

"I'm optimistic about the people and the company," he said. "What the balance sheet says is another thing."

Milacron said its rejected refinancing plan would have exchanged $115 million in bonds coming due Monday and another $140 million in eurobonds expiring in April 2005 for a combination of new debt and equity. Also expiring this weekend is a receivable financing agreement with about $30 million utilized and a $54 million bank financing agreement.

The rejected proposal called for the bondholders to receive cash of $25 million, $160 million in senior secured notes due in 2009 and 34.8 million shares of stock, plus rights for additional shares.

The 34.8 million shares would have given the bondholders group 49.9 percent of the company, Milacron said in a government filing. The proposal would have entitled the bondholders to receive up to 21.5 million additional shares of Milacron stock based on the stock's future performance. A week ago, the company said it obtained a waiver from the New York Stock Exchange allowing it to issue new shares without shareholder approval.

The rejected proposal also would have given bondholders the right to name four of the nine members of the company's board.

Standard & Poor's, the credit rating agency, said Thursday that it was keeping Milacron's debt on its watch list but with negative implications.

"We believe that given the company's recent offer to bondholders and subsequent rejection by the bondholders, it now appears less likely that Milacron will be successful in meeting debt maturities without impairing creditors," S&P said.

E-mail mboyer@enquirer.com