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American Safety Razor Files for Bankruptcy With Plan for Sale to Lenders
American Safety Razor Co., a maker of surgical blades and discount shavers, filed for bankruptcy with plans to sell itself to lenders unless a better offer comes out of a September auction.
Lenders owed $244 million signed a contract with American Safety yesterday promising to act as the stalking horse, or initial bid, at the proposed auction, according to court documents. Terms of the offer weren’t immediately disclosed.
“We are pleased to have a firm purchase offer from our primary lenders,” J. Andrew Bolt, the company’s chief financial officer and executive vice president, said today in a statement. “Their offer represents a vote of confidence for the future of our business.”
The company today blamed its bankruptcy on increased competition for inexpensive shavers and the loss of its biggest customer, which wasn’t identified, according to Chapter 11 documents in U.S. Bankruptcy Court in Wilmington, Delaware. The company listed assets of more than $100 million and debt from $500 million to $1 billion.
Based in Cedar Knolls, New Jersey, American Safety was acquired for $658 million in cash and debt in 2006 by London- based Lion Capital LLP, Bolt said in court papers filed today.
American Safety was founded in 1875 and manufactured the first safety razor for shaving in the U.S. It was a public company from 1993 until 1999, when it was bought by private equity firm J.W. Childs Associates, L.P.
The company issued a statement at the end of June saying it had a financing proposal from a major financial institution and holders of second-lien debt. The terms weren’t disclosed.
The company is the fourth-largest manufacturer and distributor of wet shaving razors and blades, it said in today’s statement.
The bankruptcy case is In re American Safety Razor Co., 10- 12351, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporter on this story: Steven Church in U.S. Bankruptcy Court in Wilmington, Delaware, at schurch@bloomberg.net. Dawn McCarty in Wilmington, Delaware, at dmccarty@bloomberg.net.
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