Owens Corning seeks approval of $18 million asphalt facility sale, $9 million vinyl siding plant sale

By Caroline Salls

Pittsburgh, Aug. 17 - Owens Corning requested court approval of the proposed $18 million sale of its Fort Lauderdale, Fla., asphalt facility and the proposed $9 million sale of its property in Olive Branch, Miss., according to Wednesday filings with the U.S. Bankruptcy Court for the District of Delaware.

High Sierra Terminaling, LLC, a subsidiary of High Sierra Energy, LP, is the buyer for the asphalt facility.

According to the asphalt facility motion, as part of the company's ongoing review of its business operations, Owens Corning has determined that the Fort Lauderdale facility is non-strategic and non-core.

The facility produces commercial roofing asphalt products for the South Florida region and, as a result, fails to support the company's overall shingle and asphalt business line, which is geared primarily toward residential markets.

Although the Fort Lauderdale facility has performed well financially in 2005 and 2006 as a result of rebuilding necessitated by recent hurricane destruction in the South Florida region, Owens Corning said it does not believe the current financial performance is sustainable.

In addition to the $18 million purchase price, High Sierra will pay the cost of some inventory at the facility.

High Sierra will pay a $500,000 deposit.

Under the purchase agreement, Owens Corning must have the option to request port access and unloading services for bulk asphalt flux materials at the Port Everglades port facility, located adjacent to the Fort Lauderdale Facility, and bulk storage of materials at the Fort Lauderdale facility, both for a period of 10 years.

Olive Branch details

An affiliate of Jancor Cos., Inc. will buy the Olive Branch, Miss., property.

In addition to the purchase price, the Jancor affiliate will also pay the cost of some inventory at the Olive Branch vinyl siding manufacturing facility.

According to the Olive Branch motion, in February, Jancor approached Owens Corning about its possible interest in plant.

Taking into account the company's ongoing need for the plant, excess capacity within Owens Corning's vinyl siding division and the appraised value of the facility, the company determined that Jancor's interest presented an attractive alternative.

A hearing on both sale motions is scheduled for Sept. 25.

Owens Corning, a Toledo, Ohio, building materials company, filed for bankruptcy on Oct. 5, 2000. Its Chapter 11 case number is 00-3837.

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