Cone Mills files for Chapter 11; will sell assets to WL Ross for $90 million

By Carlise Newman

Chicago, Sept. 25 - Cone Mills Corp. accepted a letter of intent from WL Ross & Co. to purchase substantially all of the assets of the company for $90 million and filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court in Delaware to implement the transaction.

In its bankruptcy filing, Cone Mills listed assets of $318.2 million and liabilities of $224.8 million.

The company's largest unsecured creditors are Bank of New York as trustee for $100 million in bond claims; WL Ross with $26.9 million in bank claims; Bank of America NA with $16.8 million in bank claims; J.P. Morgan Chase Bank with $6.7 million in bank claims; SunTrust Bank with $3.4 million in bank claims; and Prudential Capital Group with $20.8 million in claims in the form of a loan.

The proposed sale to WL Ross is subject to bankruptcy court approval and higher and better offers. The company expects to complete the transaction within 90 days.

The Greensboro, N.C.-based denim manufacturer's debt consists of $51 million outstanding in its credit agreement; $21.5 million outstanding in 8% notes due 2004; and $100 million in 8.125% notes due 2005.

Cone Mills has arranged for $35 million in post-petition financing from GE Capital, which will be used to fund operations prior to the completion of the transaction.

The company said in bankruptcy filings that it has proposed an amendment to its accounts receivable facility, asking for the facility to continue through its Chapter 11 proceedings. The facility allows the company to immediately collect upon sold receivables.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.