|Polyester maker Wellman files for Chapter 11|
Friday February 22, 5:44 pm ET
Wellman Inc. has filed for Chapter 11 bankruptcy reorganization.
Along with the filing, the polyester maker has received a commitment from its revolving credit-facility lenders for up to $225 million in debtor-in-possession financing.
The funds, combined with cash from operations, will be used to fund future operating expenses, including employee and supplier obligations.
"Although the company has taken numerous steps to reduce its debt and strengthen its balance sheet through the disposition of certain businesses, headcount reductions and other cost reductions, these actions were not sufficient to offset the deterioration in business conditions and the cost of our substantial debt obligations," says Thomas Duff, chief executive.
The bankruptcy filing allows Wellman (OTCBB:WMAN - News) to operate "while continuing to pursue our previously announced strategic-alternative process," Duff adds.
In October, Wellman hired Lazard Freres & Co., an investment bank with extensive experience in mergers and acquisitions for chemical companies, to explore its options.
Wellman sells polyester to the apparel, home-furnishings, nonwovens, industrial and fiberfill markets. The company is based in Shrewsbury, N.J., but most of its management and corporate staffers work in northern Lancaster County.
Published February 22, 2008 by the Charlotte Business Journal