Foamex launches rights offering, says listing status following Chapter 11 emergence not yet determined

By Jennifer Lanning Drey

Portland, Ore., Jan. 4 - Foamex International Inc. launched a $150 million rights offering under which the company will issue up to 68.2 million new shares of common stock, according to a company filing with the Securities and Exchange Commission.

Foamex has offered each holder of its common stock the right to purchase 2.506 shares for $2.25 for each share held.

Holders of Foamex preferred stock, which is convertible into 100 shares of common stock, have been offered the right to purchase 250.6 shares of common stock at $2.25 per share for each share of preferred stock held.

The rights offering will expire at 5 p.m. ET on Jan. 31.

Foamex has not yet determined whether it will list its stock after the company exits Chapter 11 or on which exchange it would be listed, according to a spokesperson for the company.

The board of directors of the reorganized company will make those decisions following Foamex's emergence from bankruptcy, he said.

The confirmation hearing for Foamex's plan of reorganization is scheduled for Feb. 1, and Foamex expects to exit Chapter 11 around the end of that month, according to the spokesperson.

Foamex common stock is traded over the counter under the trading symbol FMXIQ.

On Dec. 29, there were about 25.1 million common shares and 15,000 preferred shares outstanding, according to the SEC filing.

Foamex said it will use the net proceeds of the rights offering to satisfy its cash obligations under its second-amended plan of reorganization, including administrative claims and repayment of its debtor-in-possession credit facilities and senior notes.

Five existing shareholders have committed to fund any shortfall between $150 million and the actual rights offering proceeds.

Foamex, a Linwood, Pa., manufacturer and distributor of flexible polyurethane and advanced polymer foam products, filed for Chapter 11 on Sept. 19, 2005 in the U.S. Bankruptcy Court for the District of Delaware. Its case number is 05-12685.

© 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.