Atrium Cos., the Dallas-based firm that bills itself as North America's biggest manufacturer of residential vinyl and aluminum windows and patio doors, announced yesterday it had filed for Chapter 11 bankruptcy protection from creditors as part of a restructuring agreement with more than two-thirds of its secured lenders.
"Atrium intends to move forward with the restructuring on an expeditious basis and complete the restructuring process in approximately three to four months," the company said in a news release. The restructuring includes a $125 million investment from Kenner & Co., Atrium's current majority equity owner, and co-investor Golden Gate Capital. In return, Kenner and Golden Gate will get equity in a reorganized Atrium as well as refinancing of the senior debt obligations that they hold.
Atrium has secured $40 million in debtor-in-possession financing, which should when combined with ongoing cash flow and existing cash to provide liquidity for its operations, the company said.
"Atrium and each of its subsidiaries intend to operate as usual during the debt restructuring process, and existing management will remain in place," it said. "The company expects to deliver on all commitments to customers and honor all warranties in the normal course. The company does not anticipate any layoffs or facility closings as a result of the debt restructuring, and plans to continue to pay all employee wages and benefits in the normal and ordinary course. Suppliers will be paid under normal terms for goods and services provided after the filing date of Jan. 20. In addition, and subject to its approval, the Plan provides for the payment in full in cash of all valid claims for goods and services provided to the company before the filing, during which time the Company has remained current on all of its trade-related payment obligations."
Atrium's current management team is expected to remain in place.
"The balance sheet restructuring announced today will substantially reduce our outstanding debt and put Atrium in a much stronger financial position to grow our business over the long term," said Gregory T. Faherty, Atrium's president and CEO. "We have already done the hard work of lowering our cost structure and reducing excess capacity in light of the difficult environment under which we have been operating for more than three years. And, we are already experiencing the positive impact of these initiatives through increased profitability. Now, as part of the restructuring announced today, we will put in place a healthier capital structure that is more appropriate to the current size of the market, while freeing up additional cash that can be invested in future growth as the housing market rebounds. Once our balance sheet is right-sized, Atrium will be more competitive than ever."
Atrium's major brands are Atrium, Safe Harbor, HR Windows, Danvid Windows and Doors, Thermal Industries, Superior Windows and Doors, Champion Window, Darby Doors, and North Star Vinyl Windows and Doors.