In connection with the Company’s plan of reorganization, declared effective as of today:
The Company has exchanged approximately $620 million of existing debt for approximately $10 million in cash, $410 million in new term loans maturing in 2015, and approximately 82.6% of the common stock of Xerium.
Shares of the Company’s common stock held prior to today’s effective date have been cancelled and replaced with shares of new common stock that will commence trading on the New York Stock Exchange under the existing ticker symbol “XRM.” A total of 20 million shares of new common stock have been authorized. Shareholders of record prior to the effective date will receive new common shares representing approximately 17.4% of the issued and outstanding shares, which is equivalent to a 20-to-1 reverse split of the Company’s cancelled common stock. Shareholders of record will also receive four-year warrants to purchase up to an additional 10% of the fully diluted and outstanding shares of new common stock on the effective date.
The Company has obtained a financing facility providing revolving loans of up to $20 million and a term loan of $60 million, to be used to fund its emergence from chapter 11 and provide ongoing working capital requirements.
The Company’s newly reconstituted Board of Directors takes effect and consists of seven directors, including President, CEO and Chairman Stephen Light, one director who was nominated by the Company’s former Board of Directors, and five directors who were nominated by certain of the Company’s lenders.
The Company remains in ongoing discussions with the New York Stock Exchange’s NYSE Regulation, Inc. (“NYSER”) regarding its financial status and the listing status of its common stock. On May 18, 2010, prior to completing the financial restructuring, the Company was notified by NYSER that it had regained compliance with NYSE’s 30-trading-day $1 minimum share price standard for continued listing of its common stock, and the Company expects to remain in compliance with this standard as a result of the financial restructuring. The Company has until June 29, 2010 to regain compliance with either the NYSE’s revised $50 million market capitalization or $50 million stockholders’ equity requirement. Based on current information and circumstances, the Company anticipates that with its financial restructuring complete, the Company will be able to maintain the required thresholds and regain compliance within the applicable timeframe.
