American Safety Razor Reaches Deal With Lenders to Buy Company
Thursday, July 29, 2010
American Safety Razor Company (ASR) announced that it has reached an agreement under which the company's first lien holders will purchase the company. The company entered Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware to facilitate the transaction. The acquisition includes the assumption of trade supplier, customer and employee obligations. The transaction and filing involve only the company's U.S. and Puerto Rican operations; its other non-U.S. operations and entities are not borrowers under the debt that is being restructured.
The company announced it has over $30 million in cash reserves and received commitments for $25 million in debtor-in-possession (DIP) financing to address working capital needs during the restructuring process. According to a court filing, the DIP financing is being provided by UBS AG, Stamford Branch, as administrative agent for the DIP lenders.
Last month the company announced that it was evaluating proposals from its lender groups. After having fully assessed several viable options, the company said that the first lien lender proposal presented the strongest opportunity for future growth. "We are pleased to have a firm purchase offer from our primary lenders. Their offer represents a vote of confidence for the future of our business," commented Andrew Bolt, CFO and EVP.
ASR said that its business is operating as usual. Under the terms of the agreement, the first lien holders will serve as the stalking horse to establish a floor for a purchase of substantially all of the assets of the company under section 363 of the Bankruptcy Code. The final transaction will be subject to court approval and is expected to be completed in the fourth quarter of 2010.
"We are excited to be taking these critical steps to restructure the company and reduce our debt. As a result, we will have a stronger capital structure that will enable us to continue to invest in our people, innovations and new products," continued Bolt. The company is currently making its largest investment ever to develop and launch its next generation shaving technology in early 2011. The company reported that sales increased for the first half of 2010 by 9%.
American Safety Razor Company, LLC, which also does business as Personna American Safety Razor, is a maker of private-label shaving razors and blades.
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