Owens Corning seeks OK to loan Chinese unit $1.5 million to capitalize new trading company

By Caroline Salls

Pittsburgh, Oct. 6 - Owens Corning requested approval to loan indirect subsidiary Owens Corning (China) Investment Co. Ltd. $1.5 million to capitalize a new, non-debtor subsidiary to serve as a trading company in China, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the motion, Owens Corning has been developing a market in China for its products since 1995 and continues to evaluate and analyze the market in China for new opportunities.

The company feels it can best take advantage of the increasingly permissive foreign investment and trading climate in China by establishing a new trading company, TradeCo.

Unlike Owens Corning's existing affiliates in China, TradeCo. would have the corporate authorization, permits and licenses required to toll-manufacture products, import affiliates' or third parties' products for distribution and sale in China, export third parties' products for sale, act as a commission sales agent and undertake related commercial activities.

In order to comply with requirements regarding paid-in capital and to provide adequate working capital for its operations, TradeCo. must be capitalized with $1.5 million, with 15% to be paid upon formation of the company and the balance due within two years thereafter.

The funds for capitalization would be loaned to Owens Corning (China) Investment by Owens Corning and then contributed to TradeCo.

To date, Owens Corning (China) Investment, Owens Corning's indirect, wholly owned, non-debtor subsidiary in China, has established a series of non-debtor subsidiaries to manufacture, market, distribute and sell the company's products.

A hearing is scheduled for Nov. 14.

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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