NEW YORK — Guilford Mills Inc. last week took the first step toward emerging from bankruptcy proceedings by filing its reorganization plan.

The company said it expects to emerge by Sept. 30, the end of its fiscal year. Under the terms of the plan, Guilford’s suppliers will be paid in full. Guilford’s senior lenders will own 90 percent of the company, while current shareholders will own the remaining 10 percent. The plan still requires the approval of Guilford’s creditors and Manhattan bankruptcy court.

John A. Emrich, president and chief executive officer, said in a statement that the reorganization plan, "in accordance with a term sheet agreed to in March with our senior lenders," will "significantly reduce our senior debt, allowing us to focus on our core operations."

The senior debt facilities — a three-year revolver and a three-year term loan — will total $150 million, down from the $270 million total before the Greensboro, N.C.-based mill filed a prenegotiated Chapter 11 petition on March 13.

Two changes between the plan filed Thursday and the March term sheet include the establishment of two trusts instead of one for the disposition of non-core assets, and the elimination of a unanimous board vote requirement concerning approval over certain business transactions during the first year after emergence.

The mill in April received bankruptcy court approval of its debtor-in-possession financing facility, provided by Wachovia, for up to $30 million. Guilford said that because sales and operating profits continue to exceed its expectations, the firm is not borrowing on its credit facility.

Guilford, one of the first major U.S. mills to advocate expansion into Mexico, in April said that it was shuttering one of its two plants in that country, as well as one in Lumberton, N.C., at a combined cost of 280 jobs. Both plants made circular-knit fabrics.

The closure of the Altamira plant in Mexico, which began operations in May 2001, leaves the mill with apparel fabrics production only at American Textil, a plant in Mexico City. Guilford invested in American Textil, which produces sportswear and lining fabrics, in the mid-Eighties, its first foray into Mexico.

Other major textile firms — Burlington, Malden Mills and Galey & Lord — have sought court protection in the last year and are still in bankruptcy proceedings.

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