CEDAR KNOLLS, N.J. — American Safety Razor Co. has filed for Chapter 11 bankruptcy protection and subsequently reached an agreement to sell the company to its first-lien creditors.
The fourth-largest manufacturer and distributor of wet shaving razors and blades, American Safety Razor said Wednesday that it entered Chapter 11 in the U.S. Bankruptcy Court in Delaware to facilitate the transaction. The acquisition by first-lien lenders includes the assumption of trade supplier, customer and employee obligations.
The company noted that the filing and transaction involve only its U.S. and Puerto Rican operations and that its other non-U.S. operations and entities aren’t borrowers under the debt being restructured.
The first-lien lender proposal presented the strongest opportunity for future growth, according to American Safety Razor. "We are pleased to have a firm purchase offer from our primary lenders. Their offer represents a vote of confidence for the future of our business," Andrew Bolt, chief financial officer and executive vice president, said in a statement.
Pending court approval, the final transaction is expected to be completed in the fourth quarter.
"We are excited to be taking these critical steps to restructure the company and reduce our debt," Bolt commented. "As a result, we will have a stronger capital structure that will enable us to continue to invest in our people, innovations and new products."
American Safety Razor noted that its business is operating as usual. The company said it’s currently making its largest investment ever to develop and launch its next-generation shaving technology in early 2011. Sales for the first half of this year rose 9%.
Also doing business as Personna American Safety Razor, the company is a leading maker of private-label shaving razors and blades. Its value-priced products are sold through drug stores, supermarkets and mass merchandisers under retailer names as well as under its own brands, which include Magnum, X5, Matrix3, Mystique and Personna. In addition to shaving products, American Safety Razor manufactures and distributes blades and bladed hand tools.
"We have more than adequate resources to satisfy our obligations to employees, trade suppliers and customers and are determined to make this a seamless process for all stakeholders," Bolt stated.
