Taylor-Wharton files for Chapter 11 protection

Taylor-Wharton International, LLC, a technology, service and manufacturing network for gas applications involving pressure vessels and precision valves, has announced a plan to implement a voluntary financial restructuring. The company has reached an agreement in principle with the holders of its mezzanine senior subordinated secured notes and holders of its first lien notes to significantly improve the company's capital structure and create financial flexibility.

To facilitate its financial restructuring, TWI and its domestic operations filed voluntary Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware. The company intends to consummate its restructuring through a pre-arranged plan of reorganization, which has been filed with the court. None of TWI's operations outside of the United States were included in the filing.

Under the terms of the agreement, TWI's debt obligations will be reduced by more than 50 percent. Additionally, upon emergence from Chapter 11, the company will receive improved terms from its lenders and access to new financing, including a $25 million credit facility. The agreement also calls for the investment of new equity capital by the mezzanine holders and the company's financial sponsors, in support of the overall refinancing strategy.

In addition to improved terms and a cash infusion from its sponsors, the company has received commitments for up to $20 million in debtor-in-possession (DIP) financing from a group of lenders led by GE Capital that will be used to fund post-petition operating expenses and to meet its obligations to employees, customers and suppliers.

TWI expects operations to continue as usual during the restructuring process. The company plans to emerge from Chapter 11 on an accelerated basis. "Because Taylor-Wharton International already has a restructuring agreement in place with our lenders, the company expects to achieve plan confirmation and successfully complete the financial restructuring by the end of February," said Bill Corbin, chairman and chief executive officer of TWI. "We believe this financial restructuring is a necessary and positive step to re-align TWI's capital structure with current business operations. The commitment from our lenders and the injection of new equity represent important votes of confidence in our business, our people and our prospects. TWI will emerge from this restructuring as a stronger company with a more sustainable capital structure that reflects the current economic realities."