Xerium Technologies and 15 affiliated Debtors filed for Chapter 11 protection with the U.S. Bankruptcy Court in the District of Delaware, case number 10-11031. The Company, which is a leading manufacturer and supplier of two categories of consumable products used in the production of paper products and roll technology products installed in paper-making machines, is represented by Mark D. Collins of Richards, Layton & Finger. The Company announced that it has received overwhelming support from its lenders for a "restructuring Plan to reduce the Company's debt by approximately $150 million and significantly strengthen its long-term financial health." Concurrent with its petition, the Company also filed with the Court an Amended Joint Prepackaged Plan of Reorganization and related Disclosure Statement. The restructuring involves Xerium's companies located in the United States, Canada, Austria and its non-operating holding companies in Italy and Germany and its operating entities in Europe, Asia, South America, Italy, and Germany are not part of the Court process or the restructuring. "We are delighted to receive such overwhelming support from our lenders, which allows us to quickly move forward with our pre-packaged restructuring plan," commented Stephen R. Light, Xerium's chairman, C.E.O. and president. "This is a major accomplishment for the Company that will enable us to continue implementing our three-part operating strategy; reducing our debt load, introducing new products that our customers value and maximizing the contribution of our employees." To assure its liquidity during the restructuring process, the Company has secured a commitment from its lenders for an $80 million term and revolving credit facility and has filed motions seeking the Court's approval of the financing. Xerium announced that it will file a pre-packaged plan of reorganization that provides that approximately $620 million of existing debt would be exchanged for approximately $10 million in cash, $410 million in new terms loans maturing in 2015, and approximately 82.6% of the common stock of the Company. Existing shareholders would retain a meaningful minority equity ownership of the Company of approximately 17.4% of the common stock and receive four-year warrants to purchase up to an additional 10% of the common stock. In addition, the Company would enter into a new revolving loan of up to $20 million and a term loan of $60 million.
