Appvion sale approved by bankruptcy court
APPLETON (WLUK) -- A federal bankruptcy court has approved the sale of "substantially all" of the assets of Appvion to a group of lenders led by Franklin Advisers, the company announced.
However, the sale does not include the employee stock ownership plan, and anything employees had invested in that plan will be lost.
The sale of the company once known as Appleton Papers is expected to be completed by the end of May.
Under the terms of the executed asset purchase agreement filed with the Bankruptcy Court, the total consideration is approximately $340 million plus the assumption of substantial liabilities, including many of the Company's contractual obligations. The transaction will substantially reduce Appvion's debt from approximately $585 million to less than $175 million and provide additional liquidity to fund the Company's operations.
Appvion filed for Chapter 11 bankruptcy protection last October. A month later, the company announced it would cut around 200 jobs as it moved production of carbonless copy paper to a mill in Pennsylvania.
Kevin Gilligan, Chief Executive Officer of Appvion, said in a news release, "We are pleased to receive the Court's approval of the sale of our company to a group of our lenders who have been long-term supporters of Appvion. Their continued investment is a vote of confidence in the future of our business."
Gilligan added, "Our goal when we began the Chapter 11 process was to better position Appvion to compete long-term in the evolving specialty paper market and further invest in the innovation that has always made us a market leader. Under new ownership, Appvion will have a substantially deleveraged balance sheet, enabling us to better execute our business strategy. We expect to complete the sale expeditiously and emerge as a healthier, financially-stable business that will be an even stronger partner to all of our stakeholders in the years to come."
Franklin Advisers said, "We at Franklin Advisers are extremely pleased to see that the Court has approved the sale to allow Appvion to emerge from bankruptcy in a healthier financial position that enables long-term stability and growth while simultaneously affording us the opportunity to continue to demonstrate our commitment to both the unionized and non-unionized employees, the Company's customers, suppliers, and other stakeholders, as well as our valued clients."
Appvion produces thermal, carbonless, security, inkjet, digital specialty, and colored papers. It employs about 1,250 people in Appleton and at plants in Ohio and Pennsylvania.