Ceramic Industry

Anchor Glass Announces Recapitalization Agreement

March 27, 2002
Anchor Glass Container Corp. recently announced that it has entered into a definitive agreement with Cerberus Capital Management L.P. According to the agreement, Cerberus will invest $100 million of new capital in Anchor ($80 million of which will be in the form of equity capital) and Anchor will effect a significant restructuring of its existing debt and equity securities. The proposed plan of reorganization will result in: Anchor's existing senior bank facility being replaced in its entirety by a new $100 million credit facility; Anchor's first mortgage notes remaining outstanding and being paid an amount to compensate them for their waiver of certain change of control provisions; Anchor's unsecured notes being repaid in cash at 100% of their principal amount; Anchor's Series A Preferred Stock, which has a current accrued liquidation value of approximately $82 million, receiving a cash distribution of $22.5 million; and Anchor's Series B Preferred Stock, which has a current accrued liquidation value of approximately $106 million, receiving a cash distribution of $3.0 million.

All of Anchor's other unaffiliated creditors, including trade creditors, will be unimpaired and be paid in full in the ordinary course. Anchor's outstanding common stock will be cancelled and receive no distribution under the plan. The plan will be effected through a "pre-arranged" case under Chapter 11 of the Bankruptcy Code. It is anticipated that Anchor will commence the formal bankruptcy proceeding within the next two weeks.