Jeld-Wen put on hold its plans for a $575 million bond sale, then found itself disputing an Oregon newspaper's report suggesting that the window and door maker was facing potential bankruptcy unless it can restart the process and proceed with plans to be taken over by a Canadian investment firm.
"We're just delaying it for a short period of time until we think it is is more beneficial," Jeld-Wen communications director Teri Cline was quoted as saying in a Bloomberg article Friday about how bond issuances in August had hit their lowest total since May 2010. She did not say how long the delay would last.
The Portland Oregonian'sreport that same day painted a much darker picture, declaring: "Oregon's largest privately held company faces potential bankruptcy after failing to sell junk bonds needed for a rescue deal."
In an e-mail today to ProSales, Cline declared the Oregonian story "is based on a false premise and is extremely misleading."
"Jeld-Wen is not facing bankruptcy," she continued. "The company has more than adequate cash and liquidity to conduct business as usual." Cline also said Jeld-Wen is still pre-marketing the bond offering, adding that company has not yet actually set a price for the bonds or officially begun selling them.
The bond sale matters to Klamath Falls, Ore.-based Jeld-Wen because it's part of a larger agreement by which Onex Corp., one of Canada's biggest private equity firms, will take over what has shown many signs of being a financially shaky company. On May 5, Jeld-Wen announced Onex would invest $675 million and acquire a 39% stake. But then on Aug. 2, Onex revealed it would invest $864 million and take a 58% stake in Jeld-Wen. Then two weeks later, Jeld-Wen announced that Philip Orsino would become president that day rather than waiting until Sept. 30, as originally had been planned.
While all this was happening, Jeld-Wen in early August declared its intention to issue the $575 million in senior secured second-lien notes due 2018. The bonds, which were to be used to retire close to half of Jeld-Wen's $1.2 billion debt, got a CCC+ rating from Standard & Poor's. According to the Oregonian, Jeld-Wen's road show to promote the sale of the bonds "got a lousy reception. ... Covenant Review, an independent bond reviewer in New York, issued a searing 16-page report warning of serious problems."
