Outsourcing Solutions emerges from bankruptcy with new $90 million credit facility

By Carlise Newman

Chicago, Dec. 9 - Outsourcing Solutions Inc. has emerged from Chapter 11 bankruptcy protection. The company's growth plan includes a new multi-year, $90 million credit facility from Merrill Lynch for the purchase of portfolios of charged-off receivables.

Under the terms of the Outsourcing's reorganization plan, the company emerges with a balance sheet, including long-term debt, of $175 million, compared with $600 million in debt at the time of the Chapter 11 filing in May, according to a news release.

The company's secured creditors now will receive 69% of the reorganized company's fully diluted common stock. The company's former senior subordinated noteholders and other unsecured creditors will receive 5% of the reorganized company's common stock, and 7.5% of the common stock of the reorganized company will be held by the company's management.

Madison Dearborn Partners will receive shares convertible into 18.5% of the reorganized company's common stock in return for a new capital investment of $10 million.

St. Louis-based Outsourcing Solutions is a business process outsourcing firm providing receivables management services.

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