GREENSBORO, North Carolina -
Global Safety Textiles LLC (”GST”) today announced that it has reached an agreement with a majority of its senior lenders to successfully restructure the Company’s obligations and has filed a Plan of Reorganization with the Bankruptcy Court. Under the Plan of Reorganization, the senior lenders would receive 100% of the equity interest and long-term debt in the reorganized GST Group.
In addition, a subset of the supporting lenders also delivered a DIP loan commitment for up to US$5 million of additional liquidity, subject to Bankruptcy Court approval. Although the Company believes it has sufficient liquidity to complete its exit from the Chapter 11 reorganization process without the need for this DIP commitment, this additional show of support by the lenders provides the Company with an important liquidity cushion that will further assure the Company’s successful reorganization. The Company anticipates emerging from Chapter 11 in October 2009.
Under the Plan of Reorganization, the reorganized GST Group would emerge with US$70 million of long-term senior debt, US$30 million of convertible long-term junior debt, and a new US$5 million working capital facility. This represents a reduction of over 50% in the Company’s debt from when it filed for Chapter 11 protection in June. Giving effect to the proposed reorganization, the reorganized GST Group will be well positioned to continue to serve its automotive customers with its broad global footprint that spans Europe, the Americas and China.
The management teams of GST and its parent company, International Textile Group, Inc. (”ITG”), are committed to working together in forming a transitional services agreement to provide support for GST, its customers, suppliers, and employees. ITG is not a part of GST’s Chapter 11 proceedings, and ITG’s other operations continue to operate in the ordinary course of business.
Georg Saint-Denis, President of GST Europe and Asia, commenting on the agreement that has been reached with the lenders, said, “The Lenders’ commitment demonstrates the solid, long term opportunities of GST, which are based on innovative technologies, cost-competitiveness, and strong customer value. The new structure of the Company will provide the flexibility and financial stability to support our strategic international customers.”
Saint-Denis continued, “I, along with Frank Goehring, President of GST North America, believe the Lenders’ Plan allows GST management to act quickly to maintain the Company’s competitive leadership, preserve the value of its business, and leverage new opportunities. The successful financial restructuring of the Company will culminate management’s proactive process for dealing with the abrupt economic downturn in the global automotive industry. We believe that GST is now able to benefit from that strong position to be among the first companies with a financial structure adapted to the challenging market environment.”
GST is being advised by White & Case, Zolfo Cooper and Helbling Corporate Finance.
GST and certain of its subsidiaries filed for protection under Chapter 11 of the U.S. Bankruptcy Code on June 30, 2009. GST produces and supplies coated and uncoated airbag fabric, laser cutting services, sewn airbags and OPW airbags (One-Piece-Woven) as a Tier 2 supplier in the global occupant restraint industry, serving Tier 1 customers Autoliv, TRW, Takata and Key Safety Systems. GST is the leading independent supplier to this global market segment, whose attractive growth is driven by increasing safety awareness of car buyers and legislative vehicle occupant safety regulations. GST is a wholly owned subsidiary of International Textile Group, Inc.
Source: Global Safety Textiles LLC
Rob Deutsch +1-336-379-2507
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