Appvion to sell assets
APPLETON, Wis. — The U.S. Bankruptcy Court for the District of Delaware has approved the sale of substantially all of Appvion Inc.’s assets to a group of its lenders led by Franklin Advisers Inc. The sale is expected to be completed by the end of May.
Appvion owns a paper mill in Roaring Spring.
The purchaser submitted the previously announced stalking horse bid on Feb. 8. Under the terms of the executed asset purchase agreement filed with the bankruptcy court, the total consideration is about $340 million plus the assumption of substantial liabilities, including many of the company’s contractual obligations.
The transaction will substantially reduce Appvion’s debt from about $585 million to less than $175 million and provide additional liquidity to fund the company’s operations.
“We are pleased to receive the court’s approval of the sale of our company to a group of our lenders who have been long-term supporters of Appvion. Their continued investment is a vote of confidence in the future of our business,” said Appvion CEO Kevin Gilligan in a statement.
Gilligan said Appvion’s goal when it began the Chapter 11 process was to better position Appvion to compete long-term in the evolving specialty paper market and further invest in the innovation.
“Under new ownership, Appvion will have a substantially deleveraged balance sheet, enabling us to better execute our business strategy. We expect to complete the sale expeditiously and emerge as a healthier, financially, stable business that will be an even stronger partner to all of our stakeholders in the years to come,” Gilligan said.
Headquartered in Appleton, Wis., and employing approximately 1,250 people, Appvion operates coating and converting plants there and in West Carrollton, Ohio, as well as the Roaring Spring mill.
The sale does not include the company’s employee stock ownership plan or its pension plans. The ESOP will be terminated following completion of the sale, and the outstanding shares of company stock will be extinguished.
The pension plans will be taken over by the Pension Benefit Guaranty Corp.