Formica disclosure statement approved, will obtain $65 million in exit financing

By Carlise Newman

Chicago, Nov. 19 - Formica Corp. obtained approval for its disclosure statement from the U.S. Bankruptcy Court for the Southern District of New York. The court had conditionally approved the document with the understanding that the company would soon resolve its exit financing.

The company has completed a term sheet so that it will have access to $65 million once the plan is confirmed and effective. The exit financing will be provided by the Foothill Group Inc., an affiliate of Wells Fargo Foothill Inc.

Formica will now begin soliciting acceptances for its plan. The confirmation hearing is scheduled for Jan. 13, 2004.

On July 1 the court approved a stock purchase agreement with an investment group sponsored by Cerberus Capital Management LP and Oaktree Capital Management LLC which have committed to invest $175 million in cash in Formica and its subsidiaries.

Formica's plan incorporates an agreement as to the terms of a consensual reorganization reached with a steering committee of its senior secured lenders and its official committee of unsecured creditors.

"The court's acceptance of our disclosure statement put us in the homestretch of the financial restructuring process and gives us confidence that our successful emergence from chapter 11 is on track," said Frank Riddick III, Formica's president and chief executive officer, in a news release. "We have worked closely with our investors, principal creditor groups and the banks to develop the plan so that at emergence our consolidated debt will be approximately $160 million, as compared to more than $540 million of debt at the time of the filing. With The Foothill Group Inc. now on board, the final piece of our financial restructuring is in place, and we are positioned to emerge from Chapter 11 during the first quarter of 2004 as a financially strengthened company and formidable competitor."

Warren, N.J.-based Formica manufactures decorative surfacing materials.

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