Railworks reorganization plan gives noteholders 3% of equity

New York, March 15 - Railworks Corp. said it filed a plan of reorganization in the U.S. Bankruptcy Court for the District of Maryland in Baltimore covering itself and its 22 U.S. debtor subsidiaries.

The plan is backed by Railworks' secured lenders and primary surety.

Under the plan, secured lenders will have their claims satisfied either through issuance of a new secured note or through conversion of the claims into "substantially all" of the equity of the reorganized company.

Holders of Railworks' $170 million of 11½% senior subordinated notes due 2009 and unsecured creditors will receive 3% of the stock of the reorganized company.

Debtor-in-possession claims will be paid in full.

Existing equity will be canceled and holders will receive nothing.

The plan anticipates the reorganized Railworks will receive $250 million of debt financing and $350 million of surety bonding capacity.

Confirmation of the plan is subject to bankruptcy court approval and other conditions.

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