On 5 February, Mexican glassmaker Vitro SA, together with the other companies involved in the deal, announced completion of the sale of its US subsidiary Anchor Glass Container Corp. to Consumers Pac…
On 5 February, Mexican glassmaker Vitro SA, together with the other companies involved in the deal, announced completion of the sale of its US subsidiary Anchor Glass Container Corp. to Consumers Packaging Inc. of Canada and Owens-Brookway Glass Container of the United States. Under the terms of the agreement, which was approved by the US Bankruptcy Court administering Anchor“s Chapter 11 case on 20 December 1996, the total purchase price, subject to adjustment based on a post-closing audit, consisted of US$ 328,832,000 in cash, US$ 46,983,000 face amount of 10% Cumulative Convertible Preferred Stock and 490,898 shares of common stock of Anchor Glass Acquisition Corporation, a new corporation formed by Consumers to acquire those Anchor Glass assets not acquired by Owens-Brockway. In addition, Anchor Glass Acquisition Corporation and Owens-Brockway have assumed certain of Anchor“s liabilities. The shares of convertible preferred stock and common stock of Anchor Glass Acquisition Corporation issued to Anchor represent approximately 30% of the fully-diluted equity of Anchor Glass Acquisition Corporation. Vitro said that to facilitate the sale, it has provided the Pension Benefit Guaranty Corp. (PBGC) of the US with a guarantee of Anchor“s under-funding liability limited to US$ 70 million, payable after five years in semi-annual instalments over 10 years. But it said no payments would be made unless the successor to Anchor fails to comply with its pension obligations and the PBGC terminates any of Anchor“s three pension plans. The amount and the term of the guarantee will be proportionally reduced if the pension plans are terminated after five years from closing. The net proceeds of the sale, including the securities of Anchor Glass Acquisition Corporation, will be distributed to creditors of Anchor pursuant to a Plan of Reorganisation which will be developed by Anchor in conjunction with the Official Committee of Unsecured Creditors of Anchor. Anchor anticipates that the Plan of Reorganisation will be filed with the Bankruptcy Court during the second quarter of 1997. Immediately after the closing, the corporate name of Anchor will be changed to Anchor Resolution Corp., and Anchor Glass Acquisition Corporation will change its name to Anchor Glass Container Corporation.