Lenders to china, glassware and flatware producer Oneida Ltd. on 15 June 2004 again granted extensions on loan payments.
The company said it continues to work very closely with its lenders on impleme…
Lenders to china, glassware and flatware producer Oneida Ltd. on 15 June 2004 again granted extensions on loan payments. The company said it continues to work very closely with its lenders on implementing a “comprehensive recapitalization.” It did not go into further detail in its statement, which was issued late 15 June 2004. “We feel this is a positive development,” said Dave Gymburch for Oneida. Companies finance operations over the long term with debt, stock and retained earnings. They use recapitalizations to stabilize their capital structures or to boost stock price. Recapitalizations also are often part of bankruptcy proceedings and can include exchanging bonds for stock. Oneida lost USD 99.2 million in 2003. It has closed or sold five factories and now sources most of its products from other companies to resell under the Oneida brand name. Oneida said it is working with its lenders to obtain an agreement in principle on a recapitalization by 15 July 2004, which is the date that its loan waivers expire. If it can reach an agreement in principle, the waivers will be automatically extended through 16 August 2004 to give the company and its lenders time to complete the deal. Oneida“s bank lenders agreed to postpone until 15 July 2004 reductions of millions of dollars in credit availability that were scheduled to take effect 3 November 2003 and stretch through 3 May 2004. The company“s senior note holders also agreed to further defer until 15 July 2004 a USD 3.9 million payment originally due 31 October 2004. As Oneida works on a new capital structure, it missed the minimum payment to its pension plans. The company told the Pension Benefit Guaranty Corp. in May 2004 that it could not make the payment. The corporation is the federal agency responsible for ensuring that companies provide timely and uninterrupted payment of pension benefits. The corporation takes over plans when companies go out of business or can no longer run their pension plans. Oneida informed its 925 employees and about 1,500 retirees of the missed payment in letters over the weekend of 12 – 13 June 2004. Gymburch confirmed that Oneida recently sent a required notice about its pension plan to employees and retirees. In keeping with corporate policy, he said, he declined to discuss the specifics of the benefit plan. In April 2004, Oneida told current workers that they would not continue to accrue pension benefits after June 2004. It also told retirees that it would no longer pay for their medical insurance.