Martin Industries, Inc., a manufacturer of premium gas fireplaces and home heating appliances, said today it will sell essentially all its assets and business to Monessen Hearth Systems Company for approximately U.S. $4.4 million.
The purchase price includes a variable component that is, among other things, dependent upon the inventory and receivables on hand at the time of closing. Real estate is not included in the assets to be purchased; however, under the letter of intent signed by Martin and Monessen, Martin will lease its production facility in Athens, AL, U.S. to Monessen for a period of at least one year.
The proceeds from the sale will be used by Martin to pay down secured bank debt owed to its primary lender.
The proposed sale may be accomplished through a Chapter 11 reorganization, in which case it would need approvals required under the U.S. Bankruptcy Code. The proposed sale is subject to other conditions, including completion of a definitive purchase agreement by November 29, 2002.
Pending completion of the proposed sale, Martin expects to continue production to fill existing and future customer orders, with certain operational assistance from Monessen. Martin previously reported that it engaged Philip + Company Inc. to oversee its operations. Philip + Company is a consultant firm specializing in assisting businesses that are in under-funded or distress situations.
Martin also announced today that three directors resigned from its board: Jim D. Caudle, Sr., John L. Duncan, and Charles R. Martin. Mr. Caudle and Mr. Duncan are principals in MTIN, LLC, a secured creditor of the company. Each of the three resigning directors have advised the company that they are supportive of the company's restructuring efforts and the proposed sale of its assets to Monessen.
In light of the resignations, the board set the number of directors at three and elected William Neitzke as a director. The board also has promoted Mr. Neitzke to the position of president and chief financial officer to replace Mr. Duncan and James W. Truitt, respectively, who resigned their positions with the company.
Mr. Neitzke is a senior vice president of Philip + Company Inc. As previously announced, Martin appointed Mr. Neitzke executive vice president, a position he has now relinquished in connection with assuming the role of president and CFO.
to Daily News