REPT.21x.22.Chapter 11.We got lucky and got out then.LOL. (BSNS WIRE) Reptron Electronics, Inc. Files Chapter 11 Petition to Implement
Reptron Electronics, Inc. Files Chapter 11 Petition to Implement ''Pre-Negotiate
Business Editors
TAMPA, Fla.--(BUSINESS WIRE)--REPT--
Operations to Continue Uninterrupted
and Company Plans to Pay All Trade Creditors in Full
Reptron Electronics, Inc. (OTCBB:REPT), an electronics
manufacturing services company, announced today that it has filed a
voluntary petition for reorganization under Chapter 11 of the U.S.
Bankruptcy Code to implement a previously announced restructuring of
its 6 3/4% convertible notes through a pre-negotiated plan. On June
30, 2003, Reptron announced that it had reached an agreement in
principle with an ad-hoc committee representing approximately 56% of
the principal amount of the total outstanding notes. Along with the
members of the ad hoc committee, holders of an additional 17% of the
principal amount of the notes have expressed support of the plan.
Reptron has voluntarily chosen a bankruptcy filing to complete the
debt restructuring as it likely provides among other things, the
shortest time frame for completion with the highest degree of
certainty of outcome.
Since June 30, 2003, the Company, its current senior secured
lenders and the ad-hoc committee have negotiated the significant terms
of the restructuring included in the pre-negotiated Chapter 11 plan of
reorganization filed in Bankruptcy Court today. Reptron anticipates
that the Bankruptcy Court will confirm the pre-negotiated plan of
reorganization within 90 days to 120 days, and that the Company will
emerge from bankruptcy as soon as practicable thereafter. However,
there can be no assurance that the pre-negotiated plan of
reorganization will be approved by all requisite constituencies and
the Bankruptcy Court.
Under the proposed plan of reorganization, the Company's existing
convertible notes which total approximately $76.3 million of
principal, along with all accrued and unpaid interest, will be
exchanged for new notes with a total principle balance of $30 million.
The term of the new notes will be five years and will carry a seven
percent annual interest rate during the first two years and an eight
percent annual interest rate during the remaining three years. The
current noteholders will also receive 95% of the Company's common
shares outstanding.
Reptron intends to continue operating under Chapter 11 consistent
with its ordinary course of business practices. The Company expects to
receive Bankruptcy Court approval within the next few days to, among
other things, continue payment of pre-petition and post-petition wages
and employee benefits. Likewise, the Company will seek authorization
from the Bankruptcy Court to pay suppliers for goods and services
provided to the Company before the Chapter 11 filing, as long as these
suppliers continue to extend regular trade credit terms to the
Company. Under the pre-negotiated plan of reorganization filed by the
Company, all suppliers of goods and services are to be paid in full.
In conjunction with the pre-negotiated Chapter 11 filing, CIT
Group/Business Credit, Inc. has committed to provide $20 million in
debtor-in-possession (DIP) financing to fund the Company's operations
during the Chapter 11 proceedings. Upon approval by the Bankruptcy
Court, the DIP financing facility, together with the Company's
available cash reserves and cash provided by operations, is expected
to provide sufficient liquidity for the Company to pay for goods and
services within standard terms.
"This restructuring, once fully implemented, will allow Reptron to
take full advantage of our core strengths in electronics
manufacturing," said Paul J. Plante, Reptron's President and Chief
Operating Officer. "The restructuring of our convertible notes
completes the final step in our strategic plan which positions the
Company to take advantage of future growth opportunities," Plante
said.
Plante continued, "Through the recent sale of our distribution and
memory module divisions, Reptron has generated over $20 million in
cash proceeds and exited those businesses which accounted for the
majority of our recent operating losses. Once the restructuring is
completed, Reptron will have reduced its debt load by over $73
million, and over 60% of the Company's debt which was outstanding when
we entered 2003 will have been eliminated."
"Our customers and suppliers should experience no change in our
business operations," said Plante. "We have taken great care to make
sure that suppliers are paid in full in the ordinary course of
business and that our customers continue to receive the same high
quality service to which they are accustomed."
Following the Board's adoption of resolutions authorizing the
bankruptcy filing, and in conjunction with that filing, Mr. William
Elson, a member of the Board of Directors since 1994, resigned from
the company's Board. Mr. Elson's resignation did not involve any
disagreement with the company on any matter relating to the Company's
operations, policies, or practices, and Mr. Elson has not requested
that any matter be disclosed.
Reptron will host a conference call to further discuss the details
surrounding the filing. The call will take place tomorrow, October 29,
2003 at 9:00 a.m. EST. To participate in this call, ten minutes before
9:00 a.m. (EST), on Wednesday, October 29, please dial 1-888-695-0612
and use access code 335875.
There will also be a live Web cast of the conference call. If you
would like to listen to the call via the Web, please go to the Reptron
Electronics home page at reptron.com, 10 minutes before
9:00 a.m. (EST) on Wednesday, October 29. A replay of this
teleconference will be available beginning at noon that day. It will
play through midnight (EST), Friday, November 28. To access the
replay, U.S. callers please dial 1-888-203-1112, access code 335875. A
replay via the Internet will be available through the Reptron
Electronics corporate Web site, reptron.com for 30 days
after the call ending at midnight, Friday, November 28.
About Reptron
Reptron Electronics, Inc. is an electronics manufacturing services
company providing engineering services, electronics manufacturing
services and display integration services. Reptron Manufacturing
Services offers full electronics manufacturing services including
complex circuit board assembly, complete supply chain services and
manufacturing engineering services to OEMs in a wide variety of
industries. Reptron Display and System Integration provides
value-added display design engineering and system integration services
to OEMs. For more information, please access reptron.com
Safe Harbor statement under the Private Securities Litigation
Reform Act of 1995:
Certain of the above statements contained in this press release
are forward-looking statements that involve a number of risks and
uncertainties. Such forward-looking statements are within the meaning
of that term in Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Act of 1934, as amended. Factors
that could cause actual results to differ materially include the
following: developments in the Chapter 11 proceedings, including but
not limited to failure of Confirmation of the Company's plan of
reorganization, business conditions and growth in the Company's
industry and in the general economy; competitive factors; risks due to
shifts in market demand; risks inherent with predicting revenue and
earnings outcomes; uncertainties involved in implementing improvements
in the manufacturing process; the ability of the Company to complete
and integrate acquisitions; and the risk factors listed from time to
time in the Company's reports filed with the Securities and Exchange
Commission as well as assumptions regarding the foregoing. The words
"believe," "estimate," "expect," "intend," "anticipate," "plan,"
"appears," and similar expressions and variations thereof identify
certain of such forward-looking statements, which speak only as of the
dates on which they were made. The Company undertakes no obligation to
publicly update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise. Readers are
cautioned that any such forward looking statements are not guarantees
of future performance and involve risks and uncertainties, and that
actual results may differ materially from those indicated in the
forward-looking statements as a result of various factors. Readers are
cautioned not to place undue reliance on these forward-looking
statements.
KEYWORD: FLORIDA
INDUSTRY KEYWORD: MANUFACTURING GOVERNMENT SOFTWARE COMPUTERS/ELECTRONICS CONFER
SOURCE: Reptron Electronics, Inc.
CONTACT INFORMATION:
Reptron Electronics, Inc., Tampa
Paul J. Plante, 813/854-2000
pplante@reptron.com
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