Oglebay Norton files for Chapter 11

By Jeff Pines

Washington, Feb. 23 - Oglebay Norton Co. filed for Chapter 11 with the U.S. Bankruptcy Court for the District of Delaware on Monday.

The Cleveland-based company missed the Feb. 2 payment on its 10% senior subordinated notes due 2009 and has been holding talks with its bank lenders, its senior secured noteholders and its senior subordinated noteholders.

Just before filing for Chapter 11, the company said it had reached an agreement in principle with the majority of the senior subordinated noteholders to exchange their notes for equity.

Under the agreement, the noteholders will make a new equity investment in Oglebay Norton. Further, the company said it has made substantial progress towards obtaining a new credit facility that would retire its existing bank debt.

In addition, the company wants approval for a $75 million debtor-in-possession financing credit facility from a syndicate led by Silver Point Finance.

According to documents filed with the court, the company has total assets of $650.31 million and total debts of $561.27 million. The company estimates it has between 16 and 49 creditors.

Back in 1998, Oglebay Norton started making a number of acquisitions, which added significant amounts of debt to the company's balance sheet. As the economy fell into recession in 2001, the debt burden got heavier and demand for its products slipped, it said. By Dec. 31, it had $422 million of outstanding funded debt and on sales and operating revenue of $404 million.

Oglebay Norton mines, processes and transports industrial minerals.

The Chapter 11 case number is 04-10559.

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