NEW YORK — Wilbur Ross is at it again. On Tuesday, his investment group reached an agreement to acquire bankrupt textile mill Westpoint Stevens Inc.
“Westpoint has very good brands, does have very efficient domestic manufacturing, has $1.3 billion in sales, and will come back out under this plan debt-free and with $200 million of net worth,” Ross said in an interview. “By supplementing its U.S. production with some foreign production, it could be a truly global home fashions company.”
The home textiles firm would be the third mill bought by W.L. Ross & Co. Last year, Ross also bought Burlington and Cone, merging them into the International Textile Group, which he heads as chairman.
Ross said he hasn’t decided whether Westpoint, which no longer produces apparel fabrics, would continue to operate independently or if it would be brought under the ITG umbrella.
“It’s complicated enough to get it out of the bankruptcy,” he said, calling any move into the ITG fold “another chapter.”
He noted that Westpoint is “certainly” big enough to operate independently of the $900 million ITG. Westpoint employs about 12,000 workers, though when it completes an ongoing round of layoffs, its headcount will drop to 9,700, said Lorraine Miller, a senior vice president at the firm.
Ross’ investment concern is leading a group that also includes major Westpoint creditors, including Contrarian Capital Management and CP Capital Investments. The deal calls on participating creditors to cancel $480 million in existing debt and to invest another $207.5 million in the firm through a rights offering. It also calls for second-lien holders to receive a $10 million payout.
The deal, which is subject to court approval, calls for a closing date of July 31 and allows a breakup fee of $5 million if a higher bid is accepted.
The West Point, Ga.-based mill, which produces home fashions and bedding, filed for Chapter 11 in New York bankruptcy court in June 2003. It has restructured itself extensively since then, shutting plants and opening a sourcing office in Shanghai, China.
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