Bankrupt Cenveo gets court OK for financing
Bankrupt printing company Cenveo said Wednesday a federal bankruptcy court in New York had approved $290 million in financing, funds the firm said would ensure suppliers and other business partners would be paid on time for goods and services.
The “debtor-in-possession” financing from some of Cenveo’s existing lenders is critical to the company’s plan to keep operating normally after filing for bankruptcy last month. With the infusion, Cenveo officials said they would also be able to access up to $100 million in additional liquidity. The company expects to emerge from a reorganization under Chapter 11 of the U.S. bankruptcy code in the second quarter of this year.
“This is a critical milestone for Cenveo in these Chapter 11 cases and a step forward in achieving the plan we outlined when we filed in early February,” Cenveo Chairman and CEO Robert Burton Sr., said in a statement. “Today’s decision assures that it remains business as usual at Cenveo.”
Cenveo intends to file its reorganization plan by the end of March, a road map the company said has already garnered the support of some 61 percent of the required 66.7 percent of its “first lien” debtholders.
The company is aiming to reduce its debt by approximately $700 million. It was carrying about $1.4 billion in debt, compared with around $790 million in assets, at the end of 2017, according to its bankruptcy filing.
Still, key debtholders have expressed reservations about the company’s strategy. Manhattan-based Brigade Capital Management — which ranked as the company’s fourth-largest shareholder at the end of 2017 — last month requested in a court motion that an examiner be appointed to investigate the bankruptcy plan.
A message left Wednesday for Brigade was not immediately returned.
Others are also unconvinced. In an interview last month with Hearst Connecticut Media, Nottingham, England-based business executive Nathu Puri, the company’s third-largest shareholder, called for changes to the firm’s leadership.
“They should bring in some independent people,” Puri said.
For the third quarter of 2017, revenues totaled about $330 million, a 14 percent drop from the same period last year. The company recorded a quarterly loss of $28 million. Fourth-quarter earnings have not been released.
In the wake of the bankruptcy filing, Cenveo’s stock value has shed almost all of its value. It closed Wednesday at about 7 cents, compared with a 52-week high of $6.50.
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