WestPoint mulls its future
By Don Hogsett -- Home Textiles Today, 6/9/2003 12:00:00 AM
WEST POINT, GA —
Eager to wipe the slate clean of debilitating debt of more than $2.1 billion — and at the same time gear up for further changes in top management, and possibly even strategic focus — WestPoint Stevens could very well be poised to make sweeping changes in its operations even before it emerges from Chapter 11 some months down the road.
Last week's bankruptcy filing offered WestPoint breathing room and the leverage to make the difficult decisions that current wisdom suggests must be made. The company may soon be in a position to spend the money to shut down plants and lay off workers; shut or sell off unproductive businesses; reassess licenses that may not be working; renegotiate fees and royalties; and perhaps most important, spend the funds necessary to form overseas alliances and accelerate the sourcing of many products that it can no longer cost-effectively produce within the U.S.
Under the gun since an abortive management bid to take the company private in 2000, its sales, profits and share price plunging in a trifecta freefall — the company may be eager, and newly enabled by bankruptcy laws, to get started on the task of rebuilding more rapidly than many industry observers expect.
The bankruptcy filing dissipates a cloud of doubt that has hung suspended over the company in recent years. Crucially, it has allowed the company to begin tapping into a $300 million debtor-in-possession (DIP) loan provided by a group of banks led by Bank of America and Wachovia Bank. A U.S. bankruptcy court in the Southern District of New York has given the company a green light to use up to $175 million of the DIP financing, and a hearing set for later this month in New York City should give it access to the rest of the $300 million.
Coming Up Short
WestPoint's largest unsecured creditors
|Source: U.S. Bankruptcy Court Southern District of New York.
|Bank of NY||$525,000,000|
|Bank of NY||475,000,000|
|Ralph Lauren Home||3,025,097|
|Kosa Arteva Spec||509,455|
|Buhler Quality Yarns||482,478|
|Progress Energy Carolinas||457,482|
|DuPont Textiles & Interiors||455,694|
|CIT Grp (Hoffman Mills)||406,652|
|E.I. DuPont de Nemours||361,336|
|Imex Vinyl Pkg||343,145|
|R.L. Stowe Mills||321,843|
We would love your feedback!