Creditors Give Masonite More Time
With a missed interest payment to bondholders in October threatening its future, Masonite International Inc. on Tuesday announced that it has entered into a forbearance agreement that will buy the door maker additional time to address its financial obligations.
Under terms of the agreement, Masonite's creditors will not “exercise rights and remedies against the company solely with respect to the company’s failure to make the interest payment due on Oct. 15, 2008,” through the end of 2008. The notes are due in 2015.
“Masonite expects that this forbearance agreement will provide the company additional time and flexibility as it continues to pursue opportunities to develop an appropriate capital structure to support its long-term strategic plan and business objectives,” the company reports.
After taking on significant debt when it was acquired by Kohlberg, Kravis & Roberts & Co. in 2005, Masonite has struggled as its seen door sales slip with the weakening housing market.
“We appreciate the support of the note holders who agreed to enter into a forbearance agreement with the company, which we believe gives us additional time and flexibility as we explore all available alternatives for strengthening our capital structure,” says Fred Lynch, Masonite president and CEO. “We continue to have productive discussions with our lenders, as well as our noteholders, and are hopeful that we can arrive at a resolution that helps to position Masonite for future success.”