By James McNair
The Cincinnati Enquirer
With new executive offices awaiting it in downtown Cincinnati, Formica Corp. is preparing for life after bankruptcy.
The 91-year-old maker of laminate countertops said Friday it has completed a major financial reorganization and emerged from Chapter 11 bankruptcy. The court-approved plan lowers Formica's long-term debt by more than two-thirds, although it gives majority control of its stock to outside investors - led by a pair of vulture investment funds - that bought the reborn company's common stock for $175 million in cash.
Formica declared itself insolvent in March 2002 with $540 million in debt. Since then, the company has consolidated manufacturing and warehousing facilities, hammered out a $135 million loan deal with its secured lenders and obtained a $65 million line of credit.
But Formica's lifesaver was the $175 million in cash. Almost all of the money, from a group led by Cerberus Capital Management of New York and Oaktree Capital Management of Los Angeles, will be used to repay secured debt. The reorganization leaves Formica with about $160 million in long-term debt.
Formica received state tax breaks totaling more than $600,000 to move its headquarters from Warren, N.J., to the Chemed Center on Fifth Street in downtown Cincinnati. A spokesman said the move is under way and will bring about 35 jobs downtown.
Formica employs about 400 people at its manufacturing plant in Evendale.
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