Dayton Superior files Chapter 11 bankruptcy to complete restructuring

By Caroline Salls

Pittsburgh, April 20 - Dayton Superior Corp. filed for Chapter 11 bankruptcy Sunday in the U.S. Bankruptcy Court for the District of Delaware to complete its previously announced debt restructuring efforts, according to a company news release.

"We had sincerely hoped to restructure our debt outside of the court," president and chief executive officer Eric R. Zimmerman said in the release.

"However, in light of the unprecedented tight credit markets, we determined that this filing is the best possible course of action to achieve a sustainable long-term financial structure and secure the company's future growth and profitability.

"We will pursue a consensual plan of reorganization and debt restructuring under court protection while maintaining normal business operations."

Financing terms

The company said it has arranged for a 12-month up to $165 million debtor-in-possession credit facility from General Electric Capital Corp. to replace its existing $150 million revolving credit facility and provide immediate liquidity to help fund operations during the reorganization.

Interest on Base rate loans will be the greatest of the last quoted Prime rate, the Federal Funds rate plus 400 basis points and 4.25%, all plus 1,100 bps, or the Eurodollar rate plus 1,200 bps. Interest on Eurodollar rate loans will be the greater of 3.25% and a rate determined by the administrative agent to be the offered rate in dollars, both plus 1,200 bps.

The company will pay a $1.65 million non-refundable commitment fee as well as a $200,000 non-refundable administration fee and a 4% facility fee.

"We intend to fulfill our commitments to our employees, customers and suppliers without interruption while we restructure our debt," Zimmerman said in the release.

"It is our goal to emerge from reorganization expeditiously as a stronger company with greater flexibility, lower debt and a sustainable long-term capital structure.

"Although we are certainly feeling the effects of the recession, in 2008 we reported all-time-high operating income of $45 million on net sales of $476 million. The 9.5% operating margin was also a record.

"We are optimistic about the future as we enter the reorganization process."

Debt details

According to court documents, the company had $288.71 million in assets and $405.87 million of debt as of Feb. 27, including roughly $161 million in principal and accrued interest on its 13% senior subordinated notes due 2009 and $222 million in outstanding borrowings under its senior secured credit facilities.

The company's largest unsecured creditors include trustee Bank of New York Mellon Trust Co. NA of Chicago, with a $161.47 million note debt claim, and trustee U.S. Bank Corporate Trust Services, based in St. Paul, with a $1.03 million note debt claim.

Dayton Superior is a Dayton, Ohio-based provider of specialized products consumed in nonresidential concrete construction and concrete forming. Its Chapter 11 case number is 09-11351.

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