DIMAC Corp., St. Louis, has filed its Disclosure Statement and Plan of Reorganization with the United States Bankruptcy Court in Wilmington, DE. DIMAC and its subsidiaries filed voluntary petitions for reorganization under Chapter 11 last April.
The plan includes an additional line of credit to be extended to DIMAC by its lenders to provide liquidity when the company emerges from Chapter 11.
After confirmation and the sale of what DIMAC calls its “non-core businesses,” it expects its total indebtedness to drop to $107 million, from $391 million (subject to adjustment for the actual proceeds of the sale of selected business units). Annual cash interest expense would be lowered from more than $39 million to about $9 million.
“Over the past five months, we have enhanced the management team by hiring key individuals to lead our businesses, taken advantage of opportunities to consolidate operations, as well as improve profitability and them long-term prospects for the company,” DIMAC chairman and chief executive officer, Robert Kamerschen, said in a statement. “We made difficult, but necessary, decisions to streamline the organization by deciding to place five of our non-core businesses for sale, allowing the management team to focus on the four remaining business units.”
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