Georgia Gulf Corp. (GGC), North America’s largest maker of vinyl construction products, avoided filing for bankruptcy protection today after lenders agreed to amend a bank loan agreement and extend interest-payment deadlines on bonds.
Interest payments of $34.5 million originally due April 15 and a $3.6 million payment due today will be delayed until July 15, Atlanta-based Georgia Gulf said today in a statement.
Chief Executive Officer Paul Carrico won the third delay in as many months after saying the company may seek bankruptcy protection if it couldn’t meet today’s payment deadline. Georgia Gulf has been unprofitable since acquiring Canadian building- products maker Royal Group Technologies Inc. in October 2006, just as the U.S. housing market began to deteriorate.
Georgia Gulf fell 10 cents, or 16 percent, to 51 cents at 4:15 p.m. in New York Stock Exchange composite trading. The shares have dropped 52 percent this year.
The delayed payment was agreed to by 84 percent of holders of 9.5 percent notes due in 2014, 79 percent of investors in 10.75 percent bonds due in 2016 and 53 percent of owners of 7.125 percent bonds due in 2013, the company said.
The amendment to the company’s senior secured credit agreement excludes from the definition of “consolidated net income” a $121 million non-cash gain that resulted from an earlier loan modification.
Georgia Gulf again extended an offer to exchange $800 million of bonds for new stock and $250 million of higher- interest debt. The amended credit agreement requires bank approval to complete the exchange.
About $29.1 million of the original principal amount was tendered for exchange as of June 12, the company said. That’s less than the $33.6 million tendered as of May 29.
The company suspended its dividend in September and amended its senior secured credit facility on March 17 to avoid breaking terms of the loan agreement.
Carrico was appointed CEO in February 2008.
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