Court Say Masonite Can Meet Normal Obligations

April 20, 2009
Companies

Masonite International Inc. reports that it continues to make good progress in implementing its pre-negotiated debt restructuring plan and is on track to complete its financial reorganization within the next few months.

Last week, the door manufacturer received final court authorization to continue to meet its obligations to trade suppliers on normal terms in the ordinary course of business, it states. The company also received final court authorization to continue to utilize its cash collateral to help meet its obligations to suppliers, employees and customers. This authorization was initially granted on an interim basis on March 17.

"We are pleased that the U.S. court has granted these final orders, which allow us to continue to meet our obligations to our suppliers, customers and employees as we move forward with the restructuring process," says Fred Lynch, president and chief executive officer of Masonite. "We are making good progress in executing our plan and remain on track to meet our goal of completing this process within the next few months. We appreciate the support we have seen from our suppliers and customers as we take steps to put Masonite in a financially stronger position for the future."

Masonite also notes that the court has approved the continuation of customer programs, including its warranty programs, rebates, and incentives, during the legal proceedings. Under final orders entered by the court, the manufacturer has the right to pay in full any such valid claims that are due.

As previously announced, Masonite is implementing a debt restructuring plan that has received  support from its creditors. If implemented as proposed, this plan will enable Masonite to reduce its outstanding debt by nearly $2 billion, from $2.2 billion today to up to $300 million upon consummation of the plan, and reduce its annual cash interest costs by approximately $145 million. Under the restructuring plan, Masonite’s trade creditors will be "unimpaired" and paid in full, the company states.