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Oglebay Norton revises reorganization plan to pay noteholders interest
New York, Oct. 1 - Oglebay Norton Co. filed revisions to its plan of reorganization with the U.S. Bankruptcy Court for the District of Delaware including a change that will pay interest on its $75 million of 18% senior secured notes due 2008 and reinstate their subordination rights.
Interest will be paid in cash at the non-default rate through the effective date of the plan. The cash payment will also cover in-kind interest.
The modification gives the noteholders part of what they had requested.
An ad hoc committee of the investors had objected to confirmation of the plan of reorganization because they would lose $11.3 million they are owed for the early prepayment premium and payments at the default rate of interest, "which the debtors have admitted."
They also objected to the loss of subordination rights.
Under the plan, Oglebay is proposing to reinstate the senior secured notes and then immediately cash out the holders at 106% of par plus accrued interest after the plan becomes effective.
Oglebay has also dropped plans for a rights offering of preferred stock that would have been used to pay some creditors, according to the revisions, filed with the court Friday.
As previously reported, under the reorganization plan, holders of the company's $100 million 10% senior subordinated notes due 2009 will receive common stock.
Common shareholders will get warrants to buy common shares in the reorganized Oglebay Norton. The warrants will be for up to $5 million of common stock.
Oglebay Norton, a Cleveland-based minerals and aggregates company, filed for bankruptcy on Feb. 23, 2004. Its Chapter 11 case number is 04-10558.
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