High Voltage Engineering files for Chapter 11 again, to sell assets

New York, Feb. 9 - High Voltage Engineering Corp. filed for Chapter 11 on Tuesday, just six months after it emerged from its previous bankruptcy proceedings.

The company said it has suffered a serious cash shortage and now intends to sell all its assets under a section 363 sale. That action, High Voltage Engineering said, would maximize value for creditors.

The New Kensington, Pa., maker of industrial power control and surface analysis products previously emerged from Chapter 11 on Aug. 10, 2004 under a restructuring that converted its 10½% senior notes to equity in the reorganized company.

But since then, the company has been forced to delay payments to creditors.

With insufficient liquidity from cash flow at the principal operating subsidiaries and no ability to raise alternative financing in either the debt or equity markets, High Voltage Engineering decided to file for Chapter 11.

The assets will be sold in three groups: the Charles Evans division based in California, High Voltage Engineering Europa BV based in the Netherlands, and ASIRobicon. ASIRobicon's Pittsburgh-based Robicon Corp. and Milan-based ASIRobicon SpA subsidiaries will be sold either separately or together.

High Voltage Engineering hopes to complete the sales by June 30.

In its Chapter 11 filing, which does not include the international operations, the company listed assets and liabilities of more than $100 million.

The debt includes a $15 million term loan A and a $30 million term loan B. The original lenders were Master Senior Floating Rate Trust, Senior High Income Portfolio, Inc., Floating Rate Income Strategies Fund, Inc., Credit Suisse First Boston International, Debt Strategies Fund, Inc., Floating Rate Income Strategies Fund, Inc. and Royal Bank of Canada, although the company noted that it believes some of the lenders may have sold their positions.

The largest unsecured claim listed by the company was Grant Thornton LLP of Chicago with a $612,000 trade claim followed by Thermo Electron Corp. of Palatine, Ill., with a $160,000 trade claim.

High Voltage Engineering said Robicon also owes $2.2 million on a secured basis through mortgages on its facilities. Robicon also owes more than $20 million to trade creditors because of its inability to pay in the last 75 days.

The company has a commitment for $16.2 million of debtor-in-possession financing from GE Commercial Finance. It is asking for interim approval for $5 million, of which $2.5 million will be available immediately and $2.5 million once it meets certain conditions.

Interest on the DIP facility is at Libor plus 500 basis points, and there is a 50 basis point unused fee. The facility also has a 1.6% closing fee.

The facility will run for a year unless the reorganization becomes effective earlier.

High Voltage filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Massachusetts. Its case number is 05-10787.

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