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Thermadyne files plan of reorganization to cut debt to $220 million
By Sara Rosenberg
New York, Nov. 18 - Thermadyne Holdings Corp. filed a plan of reorganization with the Bankruptcy Court, which would reduce its total debt to $220 million, compared to almost $800 million in debt and $79 million in preferred stock when the company filed for Chapter 11 in November 2001.
Under the reorganization plan, the company will issue approximately 13.3 million new common shares and some secured lenders would provide a new working capital facility to the company upon emergence from bankruptcy. Banks would own 95% of Thermadyne stock and continue to hold about $180 million in long-term bank debt. The remaining 5% of Thermadyne stock will be owned by a group of bondholders. Furthermore, there is a provision for current bondholders to move into a majority-owner position by purchasing at least 85% of the bank's stake.
The plan is subject to approval by the court, which is expected to occur early next year, according to a news release. Once court approval is granted the reorganization plan will be distributed to creditors for voting.
"As we have always emphasized, a burdensome debt load, and not operational issues caused Thermadyne to file for protection under Chapter 11," explained Karl Wyss, chairman and chief executive officer, in the release. "The plan we have filed today will keep Thermadyne together as a unified company and removes any concerns about Thermadyne's financial viability. It allows us to focus on the business and capitalize on the strengths of our market leading brands."
Thermadyne is a St. Louis manufacturer of cutting and welding products and accessories.
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