NewsNow, USGlass, February 2010

Volume 45, Issue 2 - February 2010

NewsNow

Arch Aluminum & Glass Emerges
from Bankruptcy Protection

Arch Aluminum & Glass Co Inc. in Tamarac, Fla., announced that it has emerged from Chapter 11 bankruptcy protection following the asset purchase by Arch Glass Acquisition Corp., an affiliate of the investment firm Sun Capital. Arch filed a voluntary petition for Chapter 11 reorganization in November 2009 (see December 2009 USGlass, page 16).

“We are excited to be exiting from the bankruptcy process and we look forward to the next chapter in the history of Arch,” says Leon Silverstein, Arch’s president and chief executive officer. “We are extremely grateful to our customers who stood by us and our vendors who supported us throughout the process. There’s no question this is a challenging economic environment, but Arch is now stronger to be able to provide the best products, quality and service to the glass and glazing industry. We feel it is important that we treat our customers as one of our most important assets. We know in today’s climate our own customers might need that same help and understanding that we received. Loyalty and relationship still exist in business today and we are an example of that.”

The agreement cited a price tag for the purchased assets of just under $59 million. Earlier court documents had indicated that the asset sale was expected to “generate nearly $62.0 million of value.”

Signing the contract as purchaser was Aaron P. Wolfe, listed as vice president of Arch Aluminum & Glass Enterprises Inc., a Delaware Corp. Wolfe is listed as a principal of Sun Capital Partners on that firm’s website.

Wolfe commented on the sale, “Arch has been known as an industry leader providing high quality service and a comprehensive product offering of fabricated glass for the architectural industry and aluminum for the architectural industry. The Silverstein family has done a terrific job growing the business over the years, and we believe that our experience in similar building and construction product sectors will further enhance the position of Arch.”

“We are delighted with our agreement to be acquired by an affiliate of Sun Capital,” says Silverstein. “We have known the firm for many years, and their financial and operating expertise, spanning more than 100 portfolio companies over the past 15 years, will bring added value to our organization as we begin a new chapter in our history.”

It’s difficult to overlook one obvious connection between the two firms. Also listed on Sun Capital’s website is Mark Kuchenrither, vice president of operations. Kuchenrither served as chief financial officer of Arch Aluminum & Glass from September 2003 through June 2007, before joining Sun Capital.

International Aluminum Receives Court Approval of First Day Motions
International Aluminum Corp. (IAC), parent company of U.S. Aluminum, received approval of all of its requested motions at its “first day” hearing on January 6, 2010, regarding its Chapter 11 filing (see January 2010 USGlass, page 16). Court documents show that the company received approval to, among other things, pay pre-petition insurance obligations, employee wages, salaries, health benefits and other employee obligations during its restructuring under Chapter 11. The company also was provided authority to continue to honor its current customer programs, including warranties. The company will continue to have access to its cash and is authorized to pay ordinary course post-petition expenses without seeking court approval.

According to court documents, the Restructuring Support Agreement provides for the debtors’ financial restructuring to be effected through its reorganization plan. The required supporting holders, which together hold more than 72 percent in principal amount, and more than 50 percent in number of claims in respect of the outstanding debt under the pre-petition agreements have, along with the administrative agent, agreed to support the plan. At press time, the debtors were soliciting acceptances of the reorganization plan from holders of credit agreement claims, which will allow the plan to be approved by the bankruptcy court.

The plan says that allowed general unsecured claims “will be satisfied in full through a distribution on account of the allowed general unsecured claims and a gift from the senior lenders on or after the effective date in the ordinary course of business. The debtors expect to be able to continue to pay all trade creditors who continue to provide normal trade credit terms in the ordinary course of business, subject to any required bankruptcy court approval.”

Employees also are expected to be unaffected; in fact, the plan calls for an incentive program designed to motivate senior management “to continue efforts to foster and promote the long-term growth and performance of Reorganized IAC. Pursuant to the Management Incentive Plan, key members of senior management will be entitled to receive one time retention or transaction payments, which, in the aggregate, will range between $250,000 and $650,000 depending on certain milestones being achieved.”

Regarding its subsidiaries, the plan notes that the reorganized debtors may, among other things “cause any or all of the Debtors to be merged into one or more of the Reorganized Debtors or any of their affiliates, dissolved or otherwise consolidated, cause the transfer of assets between or among the Reorganized Debtors or any of their affiliates, or engage in any other transaction in furtherance of the Plan …”

Further details will be available upon approval of the reorganization plan this month. Check www.usgnn.com for the latest updates.
www.intlalum.com/reorg

Zeledyne to Exit Commercial Glass Production
Tulsa, Okla.-based Zeledyne announced on January 27 that it would exit the commercial glass business this spring. The company will stop shipping its architectural glass products by the end of June.

“The continuing difficulties in the economy have led to a significant decrease in our commercial glass business and we have decided to exit this business,” commented Robert Price, Zeledyne chairperson, in a statement.

Company spokesperson Della DiPietro said the move is effective March 28.

“The construction industry has taken a big hit and we had a significant loss of revenue last year, and we, as many in the market, expect that the severely depressed construction industry will continue to suffer in the future,” DiPietro told USGlass.

The company’s automotive business will not be affected by the closing of the commercial line. “That plant has fabrication operations for automotive glass and those will continue,” DiPietro said. “The plant’s not shutting down.”

Zeledyne purchased the Ford Motor Co. Automotive Components Holdings (ACH) glass business, including its Versalux brand architectural glass product, in April 2008.