Pliant exits Chapter 11, closes on $200 million exit facility

By Caroline Salls

Pittsburgh, July 19 - Pliant Corp. emerged from Chapter 11 bankruptcy after its plan of reorganization took effect Tuesday, according to a company news release.

The plan was confirmed by the U.S. Bankruptcy Court for the District of Delaware on June 23.

In addition, the company closed on a new $200 million senior secured revolving credit facility with Merrill Lynch Commercial Finance Corp. to replace Pliant's existing pre-bankruptcy revolver and debtor-in-possession credit facilities.

According to the release, the financial restructuring significantly increases Pliant's free cash flow, reduces debt and interest expense and eliminates all existing mandatory redeemable preferred equity through an exchange with holders of the company's 13% senior subordinated notes, series A and series B preferred stock and common stock.

Additionally, the company's first-lien and second-lien senior secured notes have been reinstated, and the interest rate on the first-lien notes has been increased by 0.225% per year.

Holders of the second-lien senior secured notes will be entitled to receive payment of interest accrued through March 1 and a cash consent fee.

The record date for payments to holders of the second-lien notes is July 24.

"Today marks a successful completion of an important process," president and chief executive officer Harold Bevis said in the release.

"I am pleased we have now accomplished our objective of improving Pliant's balance sheet and cash flow, to enable us to continue executing our business plan and investing in our business on a sustained basis.

"From the start, our goal has been to get in and out of Chapter 11 as quickly as possible, to minimize the cost of the process and the impact on our company. We are all excited about Pliant's future."

Plan creditor treatment

Treatment of creditors under the plan will include:

• Holders of Pliant's $320 million of 13% senior subordinated notes will receive up to $35 million in new senior subordinated notes, their share of the reorganized company's common stock and newly issued series AA redeemable preferred stock, as well as cash equal to the consenting noteholders' professional fees.

• Holders of revolving credit facility claims, general unsecured claims and debtor-in-possession facility claims will receive 100% cash recovery.

• Holders of first-lien note claims will have their claims reinstated and will receive their share of first-lien additional interest.

• Holders of second-lien note claims will have their claims reinstated and will receive their share of second-lien additional interest.

• Holders of series A preferred stock interests will receive a share of the series A/series AA preferred stock and the series A common stock.

• Holders of series B preferred stock interests will receive $5,258 per share in cash, provided that the holder is eligible to participate in the management stock plan or deferred cash incentive plan.

All unvested series B preferred stock interests will be canceled and holders will receive no distribution.

• Holders of outstanding common stock interests will receive their share of new common stock in the reorganized company.

Pliant, a Schaumburg, Ill., producer of film and flexible packaging products, filed for bankruptcy on Jan. 3, 2006. Its Chapter 11 case number is 06-10001.

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