International Wire files prepackaged Chapter 11 after reaching agreement with noteholders

By Peter Heap

New York, March 24 - International Wire Group, Inc. filed for voluntary protection under Chapter 11 of the U.S. Bankruptcy Code after reaching agreement with an ad hoc committee of bondholders and its largest equity holder on a debt restructuring.

Under the proposed deal, International Wire will cut its debt to $163 million from $389 million.

The company's existing $305 million principal amount of senior subordinated notes will be exchanged for 96% of the common stock of the reorganized company and $75 million of new 10% unsecured notes.

The St. Louis wire manufacturer has entered into a lock up and voting agreement with holders of more than a majority of its 11¾% senior subordinated notes due 2005 and 14% senior subordinated notes due 2005 to put the plan into effect.

International Wire said it has commitments from a group of lenders led by Highbridge/Zwirn Special Opportunities Fund, LP for $140 million of debtor-in-possession financing.

The DIP facility will be used to repay the company's $82 million of 10 3/8% senior secured notes due 2005 and to provide working capital during the reorganization.

"The recapitalization will dramatically improve International Wire's capital structure, significantly increasing free cash flow and resulting in a substantially stronger balance sheet, which will permit the company to focus on its business and customers," said chief executive officer Joseph M. Fiamingo in a news release.

International Wire made its prepackaged Chapter 11 filing in the U.S. Bankruptcy Court for the Southern District of New York under case number 04-11991.

In the filing, International Wire said it had $82 million of the 10 3/8% senior secured notes held by approximately 10 investors, $300 million of the 11¾% senior subordinated notes in two equally sized series of $150 million, each held by approximately 50 investors, and $5 million of the 14% senior subordinated notes held by one investor. The amounts exclude accrued interest.

It listed total assets of $393 million and total debt of $488 million as of Dec. 31, 2003.

The largest unsecured creditor was given as Bank of New York as indenture trustee for the 11¾% notes with a claim of $150 million, as indenture trustee for the second series of 11¾% notes with a second claim of $150 million, and as indenture trustee for the 14% notes with a claim of $5 million.

International Wire previously missed the coupon due Dec. 1, 2003 on its senior subordinated notes.

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