Masonite Completes Restructuring to Emerge from Bankruptcy

June 10, 2009
Companies

Masonite International Corp. successfully completed its financial restructuring and emerged from protection under both Chapter 11 of the U.S. Bankruptcy Code and the Companies' Creditors Arrangement Act in Canada, company officials reported yesterday.

“This restructuring process has made Masonite a financially healthier and stronger company better positioned for the future,” said Fred Lynch, Masonite president and CEO. “We achieved our goal to successfully complete our debt restructuring plan and emerge from Chapter 11 and CCAA within 120 days of filing in no small part because of the extraordinarily constructive work we undertook with our lenders to develop an outstanding capital structure to support our long-term business objectives.”

By working constructively with its lenders, who voted overwhelmingly in support of its restructuring plan, Masonite reduced its debt from $2.2 billion in March to $11.3 million of term debt and less than $2 million of other debt. Immediately upon emergence, Masonite is paying off the $11.3 million of term debt, leaving less than $2 million of debt on its balance sheet with cash-on-hand of over $140 million. In addition, the door manufacturer expects to close shortly on an asset-backed, revolving line of credit facility of up to $150 million.

As previously announced, both Masonite’s term lenders and bond holders voted overwhelmingly in support of the restructuring plan. The term lenders have converted 99 percent of their $2.2 billion in debt holdings into equity, officials note.

“At Masonite, we have many parties to thank for this successful outcome, including our employees, our advisors, our board, our lenders, and everyone else who have remained steadfast in their support for the company. With the financial restructuring now behind us, we look forward to continuing to provide outstanding products and service to our loyal customers around the world,” Lynch added.

Masonite emerged from Chapter 11 and CCAA protection after meeting all closing conditions. Its plan of reorganization was confirmed by the U.S. Bankruptcy Court in Wilmington, Del., on May 29, while the Ontario Superior Court of Justice approved its CBCA plan on June 1.

At respective court hearings regarding confirmation of the plan of reorganization in the U.S. and the CBCA plan in Canada, Judge Peter J. Walsh of the United States Bankruptcy Court and Justice Colin L. Campbell of the Ontario Superior Court of Justice each praised Masonite and its lenders for working cooperatively during the restructuring.

“In terms of deleveraging the balance sheet and in terms of the absence of any serious disputes and in terms of the vote, I haven’t seen one like this in ten years,” said Walsh. 

“This case should be a model for cooperative cross-border restructurings," Campbell noted.