| (UPDATE: Adds agreement with creditors, DIP financing)
WILMINGTON, Del., Jan 16 (Reuters) - Imperial Sugar Co., the largest
U.S. processor of refined sugar, filed for bankruptcy Tuesday after
reporting wider-than-expected losses last month and a possible default on
a senior credit agreement.
In papers filed in the U.S. Bankruptcy Court in Delaware seeking
chapter 11 protection from creditors, Imperial (AMEX:IHK - news) listed
consolidated assets of $1.1 billion and debts of $775.1 million, including
an unsecured claim of $263.5 million for bond debt for which U.S. Trust in
Dallas, Texas is the indenture trustee.
The company said in a statement it also filed with the court a
reorganization plan negotiated with its senior bank lenders and with
bondholders with a majority interest in amount of Imperial's 9-3/4 percent
senior subordinated notes due 2007.
Under the plan, current note holders and certain unspecified unsecured
creditors will receive 98 percent of the equity in a reorganized company.
Current shareholders will receive the remaining two percent plus
seven-year warrants to buy an additional 10 percent of the restructured
company on a fully- diluted basis.
Imperial said it also has an agreement for up to $85 million in
debtor-in-possession (DIP) financing from its lenders, who have also
agreed to provide $307.0 million of exit financing. The DIP financing,
which is subject to court approval, will be used to allow the company to
continue normal business operations.
Last month, the company attributed its problems to significantly lower
sales prices for refined sugar, as well as higher energy costs, which more
than offset benefits from lower raw sugar costs. At that time, Imperial
said it was in talks with creditors and considering a possible bankruptcy
filing.
Chief Executive officer James Kempner said: ``The plan has received
strong support from our banks and bondholders. The elimination of $250
million of debt will deliver our balance sheet ... We expect no disruption
to our operations.''
Those listed in court papers as owning at least five percent of
Imperial's voting securities are Greencore Group Plc and David Dilger;
I.H.Kempner III and Harris Weston; Dimensions Fund Advisors Inc.; and
United States National Bank.
Imperial, which is based in Sugar Land, Texas, markets products under
trade names that include Dixie Crystals, Spreckels, Pioneer, Holly, and
Diamond Crystal. |