Spectrum Brands and its U.S. subsidiaries, including Remington Products, filed a pre-negotiated plan for reorganization under Chapter 11 in the U.S. Bankruptcy Court in San Antonio, TX, U.S.
The company said it reached agreements with noteholders representing approximately 70% of the face value of its outstanding bonds to pursue a refinancing that would enable Spectrum Brands to reduce the amount of debt on its balance sheet by approximately US$840 million (or approximately one-third), eliminate approximately $95 million in annual cash interest payments for at least each of the next two years, and free up additional cash that can be reinvested in its business. The company currently has outstanding indebtedness of approximately $2.6 billion.
Kent Hussey, CEO of Spectrum Brands, said: "We estimate that when this refinancing has been completed, the company will generate in excess of $100 million in annual free cash flow."
Hussey said Spectrum’s Global Batteries and Personal Care segment delivered its eighth consecutive quarter of adjusted EBITDA growth for 1Q 2009. Spectrum's non-U.S. operations, which are legally separate, are not included in the Chapter 11 proceedings.
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