Pillowtex girds for lively auction
By Brent Felgner -- Home Textiles Today, 9/29/2003 12:00:00 AM
NEW YORK —
A large segment of the home textiles and retail industries — and, it seems, a sizable chunk of the legal profession — today were watching the clock tick down to a 4:00 p.m. deadline for filing bids for Thursday's Pillowtex auction here.
Speculation surrounding the bidders' identities, their number and bid amounts has been expansive for weeks. But the process has been protected by a series of confidentiality agreements required of anyone even remotely connected to the auction, although the negotiating and bidding strategies alone probably would have obviated the need for more formal confidentiality requirements.
What is known — or at least accepted as industry truth — is that Springs Industries remained interested in the Pillowtex brands and other assets. The U.K.'s Broome & Wellington and Welspun India had at least expressed earlier interest in making bids on some assets. And Brazil's Coteminas at one point had its legal representatives sitting in the courtroom during bankruptcy court hearings.
But those clearly are not the only potential bidders. Other foreign and domestic suppliers, and even some retailers, have been mentioned as possible players in the auction.
Pillowtex executives and a spokesperson didn't respond to telephone inquiries prior to mid-afternoon Friday.
But Pillowtex president Michael Harmon earlier stated 30 to 50 companies had at least "expressed interest" in all or some of Pillowtex's assets, although he refused to characterize how many of those might be serious contenders to actually file a bid or what the amounts might be.
All he would say at the time was that he expected the bidding to be very active and for the Oct. 2 auction to be a "very long day." Moreover, court papers filed by Pillowtex originally set a threshold of $165.5 million for executive bonuses to kick in, perhaps an indication of where their expectations laid.
If true, the $56 million stalking horse bid by GGST LLC might no longer be the one to beat. If true, the bid accomplished at least part of its objective to bring additional, higher, bidders to the table.
It's unlikely that anything will be known definitively before day's end Thursday — an admittedly optimistic estimate. Most likely the successful bids and bidders' identities will await the bankruptcy court's sanction in an Oct. 7 hearing.
But other portions of the process have already been under way. As market week took place in New York, Pillowtex filed papers for the planned sale of its Columbus, GA, and Phenix City, AL, plants for a total of $10.1 million.
The Columbus facility is being sought by Eagle Phenix Partners LLC, while the Phenix plan is being bid on by John Dudley Jr. along with Eagle Phenix Partners, according to the filing.
Columbus was used for yarn spinning, wet finishing and slashing operations, while Phenix City was a cut-and-sew finished towel facility.
Separately, dozens of individual sales agreements have already been filed with the court to sell down the company's inventories of raw, greige and finished goods. Those, too, will be considered for approval by the court in the Oct. 7 session.
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