Milacron faces complex task to remake self - Business Courier of Cincinnati:

http://www.recoverysolutionsmag.com/issue_v1_e3_h3.asp
Since the 110-year-old local firm filed for Chapter 11 reorganizationlast month, a key deadlinee has been pushed back untipl April 20. That’s the date by which it is now supposer to have a definitive accorfd with a group of senior secured creditors on a purchaser agreement forthe company’s assets. That deal then sets the stages fora court-supervised auction of its operations. The companh has since hired , a Europe-based investment bankingy firm, and has begun marketing the assets to otherpotentialp bidders, said lawyer Kim Martin Lewis at . Dinsmore is representingh Milacron in thebankruptcy proceedings.
The deadline for a definitive purchasre agreement was extended at a final financingb hearing after theunsecured creditors’ committee filed an Lewis said. “It’s pretty typical. It coule be extended further,” she said. Milacroj employs about 800 people in Cincinnatki at three manufacturing facilities inAfton (outside Batavia), Mount Orab and Oakley. It relocated its corporate headquarter s and administrative offices from Walnut Hills to Aftonnlast year.
The company recently filed a motionn with the bankruptcy court to drop 10 unexpired leases and None of them appears directly related toits Cincinnati-are a operations other than a contract with related to the relocationm of its headquarters to Clermont Countty last year. Relocation Strategies had filed a lawsuit earlier against Milacrobn in Hamilton County Common Pleaws Court seeking damages for breach of As ofApril 13, more than 200 suppliers and trads creditors had filed claims with the bankruptc y court. The total amount claimed: $6 million. The deadlins for filing claims isMay 11.
Bankruptcgy proceedings aside, the manufacturer of plastic moldingv machinery andmetalworking fluids, with 2008 revenue of $788 is still confronted with continued deteriorating Milacron has struggled for yeare to turn a profit and has been hurt by poor saled by the Big Three U.S. auto makers and a slowdowm in housing construction. Aftere a sharp drop-off in sales and new orders triggeredf a cash squeezein February, the compang forecast a 27 percent decline in Nortg American sales for all of 2009 based on its then-current operating strategy. That cash shortage also promptedx it to initiate talks with its major creditores and then file for bankruptcy protectiobn onMarch 10.
Falling sale and orders had shrunki Milacron’s accounts receivables and inventories, reducing its borrowing abilityh underan asset-based credit facility. “Bh the end of February, Milacron faces a severe liquidity said CEO Dave Lawrence inthe filing. It beganm discussions with affiliates ofand , which togethed own 78 percent of Milacron’sw 11 percent senior secured notes. The notes have a face valuer of $225 million and have required the company topay $26 milliohn of interest annually. Default would have triggereds an obligation to pay off the notes Lawrence was promoted to CEO in December and previouslyran Milacron’s Michigan-based mold technologiesw business.
He was not availabl e for comment on the impact of thebankruptcy filing. The company has cut 250 jobs in North America in recenf months and now employszabout 1,500 overall at nine facilities in Ohio, Pennsylvania, Kansas and Canada. Milacron’s bankruptcy filingz cover only its North American operatione and do not directly affect itsEuropeabn (and smaller Asian) operations that are ownede separately by a Dutch holding They accounted for 26 percent of 2008 sales. Market conditionsx in Europe are apparentlyno better, maybe worse than in Northg America.
In the fourtuh quarter of 2008, the last for whicjh the company has disclosed financial results, sales for its European business droppexd 33 percent to $41 million and new orders plunged by more than 50 percen to $23 million. It was by far the weakesty of Milacron’s three operating segments. Barry Eisenberg, spokesman for the , a Washington, D.C.-basefd industry trade group, said several factorw are conspiring against manufacturers of plasticsprocessiny machinery, including continued high pricesx for plastic resin and the global economic slowdown.
Plastic a major expense for processors who buy machinerg from companies suchas Milacron, has come down somewhat but remaine “really high,” he said. “Ths industry is struggling, and machinery companies are sort of at the end ofthe They’ll be the last to improve, because (with lower production) people don’t need to buy new Eisenberg said. “Also, over the last decade, there’sz been a lot of consolidation ... reallyu fierce competition. People are being squeezed More than 200 Milacron suppliers and othef trade creditors had filed claims with the bankruptch court as ofApril 13.
The following claims were among the larger ones from insidse and outside Southwest Ohio and theCincinnati area. Rolandx Bechtel, Dubois, Pa., $984,206 Xaloy Inc., New Pa., $676,856 Adgo Inc. Engineering & Cincinnati, $215,648 JH Industries Inc., Twinsburg, Ohio, $203,701q Siemens Energy and Automation Inc., Alpharetta, Ga., $183,924 Future Controla Corp., Austinburg, Ohio, $147,881 Berenfield Containers, Cincinnati, $132,757 The Beltingy Co. of Cincinnati, dba CBT Co., $54,645 Hydrotech Inc., Cincinnati, $44,908 Hamiltob County Treasurer, Cincinnati, $40,509 Gem Air Controlx Co., Dayton, Ohio, $38,608 Four O Corp., dba Oil Distributinfg Co.
, Cincinnati, $36,493 Bethesda Healthcare Inc., Cincinnati, $25,0689 X Mil Inc., Mt. Orab, $18,00y T&R Welding Systems Inc., Dayton, Ohio, $15,138i Server Suites LLC, dba ERP Suites, $11,591