July 1 (Reuters) - American Safety Razor Co, a maker of shaving razors, said it received a refinancing proposal from its junior lenders, and a deadline would be extended to give them time to develop their plan.
Second-lien lenders had until the end of June to propose a way to restructure the company's finances or it would file for bankruptcy, Reuters reported last week, according to sources.
First-lien lenders, led by Swiss bank UBS AG, had given the company a covenant waiver until the end of June.
On Wednesday, the company said in a statement that the waiver was extended again to give the second-lien lenders time to pursue the refinancing, which had been proposed by a major financial institution.
The proposal involved only the company's U.S. and Puerto Rican operations as its other non-U.S. operations and entities were not borrowers under the debt being refinanced.
The privately-held company lost a contract with Wal-Mart Stores Inc earlier this year and sales slowed. It first missed a debt covenant in the last quarter of 2009 and has been negotiating with its lenders -- a group that includes Apollo Investment Corp.
The company is also reviewing a backup proposal from its first-lien lenders should the second-lien proposal not be consummated.
'Both alternatives would have no operational impact on the company or its stakeholders,' the statement said.
Sources told Reuters last week the company was considering a sale to UBS after filing for bankruptcy.
The sources said UBS is the largest holder of its senior debt of about $250 million. Standard & Poor's estimates the company's total debt at $540 million as of last year.
In addition to razor brands such as Matrix3, M5Magnum, Solara and Mystique, the company makes single-edged blades used in utility knives and surgical tools. Its shaving razors are typically sold in drug stores such as Walgreen Co under the stores' own brand.
Lion Capital, a European private equity fund, bought American Safety Razor for $625 million in 2006 from Boston-based private equity firm J.W. Childs Associates. UBS arranged the financing for that deal.
The company did not return a call for comment.
(Reporting by Santosh Nadgir in Bangalore, Tom Hals in Wilmington, Delaware and Caroline Humer in New York; Editing by Derek Caney) Keywords: AMERICANSAFETYRAZOR/REFINANCING (thomas.hals@thomsonreuters.com; 1-646-223-6356; Reuters Messaging thomas.hals.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Second-lien lenders had until the end of June to propose a way to restructure the company's finances or it would file for bankruptcy, Reuters reported last week, according to sources.
First-lien lenders, led by Swiss bank UBS AG, had given the company a covenant waiver until the end of June.
On Wednesday, the company said in a statement that the waiver was extended again to give the second-lien lenders time to pursue the refinancing, which had been proposed by a major financial institution.
The proposal involved only the company's U.S. and Puerto Rican operations as its other non-U.S. operations and entities were not borrowers under the debt being refinanced.
The privately-held company lost a contract with Wal-Mart Stores Inc earlier this year and sales slowed. It first missed a debt covenant in the last quarter of 2009 and has been negotiating with its lenders -- a group that includes Apollo Investment Corp.
The company is also reviewing a backup proposal from its first-lien lenders should the second-lien proposal not be consummated.
'Both alternatives would have no operational impact on the company or its stakeholders,' the statement said.
Sources told Reuters last week the company was considering a sale to UBS after filing for bankruptcy.
The sources said UBS is the largest holder of its senior debt of about $250 million. Standard & Poor's estimates the company's total debt at $540 million as of last year.
In addition to razor brands such as Matrix3, M5Magnum, Solara and Mystique, the company makes single-edged blades used in utility knives and surgical tools. Its shaving razors are typically sold in drug stores such as Walgreen Co under the stores' own brand.
Lion Capital, a European private equity fund, bought American Safety Razor for $625 million in 2006 from Boston-based private equity firm J.W. Childs Associates. UBS arranged the financing for that deal.
The company did not return a call for comment.
(Reporting by Santosh Nadgir in Bangalore, Tom Hals in Wilmington, Delaware and Caroline Humer in New York; Editing by Derek Caney) Keywords: AMERICANSAFETYRAZOR/REFINANCING (thomas.hals@thomsonreuters.com; 1-646-223-6356; Reuters Messaging thomas.hals.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
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