NEW YORK — Friday is going to be a big day at Burlington Industries Inc.’s Greensboro, N.C., headquarters.
That’s the day the employees will meet the firm’s new owner, bankruptcy baron Wilbur Ross.
In a Monday phone interview, Ross said his investment firm, W.L. Ross & Co., was declared the winner of the auction in New York for the firm that was once the world’s largest textiles mill.
Ross plans to sell the Lees Carpet division to Mohawk Industries Inc., as was reported. He declined to reveal his plans for the rest of the company, which includes the Hong Kong-based Burlington Worldwide apparel division, an apparel-fabrics plant in Mexico, an apparel joint venture in India and the Burlington House division, which makes home furnishings fabrics.
“I’m planning to go to Greensboro first thing Friday morning,” Ross said. “We’d like the employees to be first to hear the plan.”
Ross said his winning bid was $620.1 million, up from his initial bid of $608 million. That’s $41.1 million more than the $579 million bid made by Warren Buffett’s Berkshire Hathaway in February.
Burlington said in a statement Monday that the higher bid means unsecured creditors will receive an estimated payout of about 41.5 cents on the dollar for their claims, up from the 40 cents they’d have gotten as a result of the initial bid.
Burlington’s statement said the deal includes $614 million in cash and a $6.1 million credit related to an enhancement of the breakup fee negotiated earlier in the month. The deal will be formally presented Thursday to the U.S. Bankruptcy Court in Wilmington, Del., for approval.
George W. Henderson, the mill’s chairman and chief executive officer, was said to be traveling back from the auction, which lasted several hours, and was unavailable for comment.
According to sources, Mohawk has agreed to pay more than $350 million for the Lees operation. Officials at the Calhoun, Ga.-based carpet maker could not be reached for comment.
Lees was the most profitable of Burlington’s operations for the six months ended March 29, according to a recent filing with the Securities and Exchange Commission. For that period, Lees reported $14 million in operating income on sales of $114.4 million. Burlington as a whole recorded a $24.2 million net loss on sales of $400.3 for the same period, which compared with a $201.7 million net loss on sales of $509.3 million a year earlier.The apparel fabrics business recorded a $4.9 million operating loss on sales of $195.7 million, compared with a $29.2 million net loss on sales of $246 million. The furnishings unit posted a $1.2 million operating loss on sales of $86 million.
Burlington significantly restructured its operations in the years leading up to and since its November 2001 Chapter 11 filing. The mill closed many underperforming units and opened two key ventures in the apparel field.
Burlington Worldwide, based in Hong Kong, is now the company’s apparel arm and sells fabrics made at Burlington-owned properties and at foreign contractors. Nano-Tex, an Emeryville, Calif.-based company in which Burlington holds a majority stake and which was not part of the initial bankruptcy filing, develops and licenses nanotechnology enhancements that can give fabrics properties including resistance to wrinkles and stains.
With court approval, the deal should be completed by October.
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