16 April 2004
16 April 2004
Glass fibre yarn suppliers, AGY Holdings, have emerged from Chapter 11 bankruptcy protection, and have appointed Douglas J. Mattscheck as the new President and CEO.
AGY retained Carl Marks Consulting Group, LLC, to lead its turnaround and restructuring efforts and fill the interim roles of Chief Restructuring Officer.
AGY management worked closely with CMCG to develop and implement an operating and financial reorganization strategy. The reorganization plan, confirmed by the bankruptcy court on March 8, 2004, includes a $120 million rollover term loan with Wachovia Bank as agent and a $30 million working capital facility with CIT. During the pendency of the bankruptcy, AGY generated over $8 million of surplus cash. Half of the surplus will be used to pay down the emergence rollover debt and the other half will be paid to the pre-petition lenders. AGY’s corporate structure has been converted from an LLC into a “C” Corporation, primarily owned by its pre-petition senior secured lending group. Its senior unsecured notes have been cancelled, along with all equity interests of the former owners.
“We are very excited with the progress and achievements during the last 15 months,” said Marc Pfefferle, Chief Restructuring Officer of AGY and Managing Director of CMCG. “AGY management and CMCG successfully worked together to allow AGY to emerge on solid financial footing and put the company in the position to achieve profitable and sustainable growth. During the Chapter 11 period, the Company retained 100% of its customer base and made significant progress in new product and process developments.”
A number of actions were implemented during the reorganization period to improve the Company’s long-term cost position and support future profitable growth. These actions included a 16% reduction in salaried staffing levels, converting fixed-based pension contributions to a performance-based approach and utilizing Section 1113 provisions in the Bankruptcy Code. These and other actions generated another $2 million-plus in annual savings.
“While AGY’s reorganization has been a great success by any yardstick, such success would not have been possible without strong customer, vendor and constituent support, the enormous effort and painful sacrifices made by AGY’s 900-plus employees and the efforts by AGY’s labor unions to save jobs,” Pfefferle said. “While much work remains, we are pleased with AGY’s progress thus far and the Company is well positioned to meet its future goals.”
The Board of Directors of AGY Holding elected Mattscheck, president and chief executive officer of AGY, effective immediately. Mattscheck joins AGY after seven years as president of St. Gobain Technical Fabrics, headquartered in Niagara Falls, NY. Under his leadership, the business grew from a relatively small operation to one of the world’s largest weavers and fabricators of glass fibre reinforcements. “Through my experience in the glass industry, I am already familiar with the company’s products and markets,” Mattscheck said. “Now, as AGY emerges from bankruptcy, the company is poised to invest in the future and grow. I look forward to being part of that process.”