-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WTi3JTtVRUnvX3ES7iO0Rr/g7lszw2ahSH3+gVNd1QLXDGjgbrL7Luqa0InRogft vCI3sc9ew/JwmDO799FxSA== 0000905148-05-005908.txt : 20051207 0000905148-05-005908.hdr.sgml : 20051207 20051207142205 ACCESSION NUMBER: 0000905148-05-005908 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20051201 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051207 DATE AS OF CHANGE: 20051207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PLIANT CORP CENTRAL INDEX KEY: 0001049442 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS, FOIL & COATED PAPER BAGS [2673] IRS NUMBER: 870496065 STATE OF INCORPORATION: UT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 333-40067 FILM NUMBER: 051249279 BUSINESS ADDRESS: STREET 1: 1475 WOODFIELD ROAD CITY: SCHAUMBURG STATE: IL ZIP: 60173 BUSINESS PHONE: 8479693300 MAIL ADDRESS: STREET 1: 1475 WOODFIELD ROAD CITY: SCHAUMBURG STATE: IL ZIP: 60173 FORMER COMPANY: FORMER CONFORMED NAME: HUNTSMAN PACKAGING CORP DATE OF NAME CHANGE: 19971110 8-K 1 efc5-2511_form8k.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): December 1, 2005 PLIANT CORPORATION ------------------------------------------------------- (Exact Name of Registrant as Specified in Charter)
Utah 333-40067 87-0496065 ------------------ -------------------------------- ------------------------------- (State or Other (Commission File Number) (IRS Employer Jurisdiction of Incorporation) Identification Number)
1475 Woodfield Road, Suite 700 Schaumburg, IL 60173 (Address of Principal Executive Offices) (Zip Code) (847) 969-3300 (Registrant's telephone number, including area code) N.A. (Former Name or Former Address if Changed Since Last Report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: /_/ Written communications pursuant to Rule 425 under the Securities Act /_/ Soliciting material pursuant to Rule 14a-12 under the Exchange Act /_/ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act /_/ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act ITEM 8.01. Other Events. On December 1, 2005, Pliant Corporation issued a press release announcing an agreement in principle with a committee representing certain of the holders of the company's 13% Senior Subordinated Notes and with a majority of the company's current equity holders. The press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference. A term sheet summarizing the proposed terms of the agreement in principle is attached as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by reference. ITEM 9.01. Financial Statements and Exhibits. (c) The following items are included as Exhibits to this report: 99.1 Press Release dated December 1, 2005. 99.2 Summary of Proposed Terms SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PLIANT CORPORATION Date: December 7, 2005 By: /s/ Joseph Kwederis ----------------------------------------- Joseph Kwederis Senior Vice President and Chief Financial Officer 2 EX-99.1 2 efc5-2511_exhibit991.txt Exhibit 99.1 ------------ FOR IMMEDIATE RELEASE December 1, 2005 PLIANT CORPORATION SLASHING DEBT BY 49% AND ANNUAL INTEREST EXPENSE BY 57% Deal would reduce debt by $578 million and annual interest expense by $84 million SCHAUMBURG, IL - Pliant Corporation announced today that it has reached an agreement in principle with a committee representing the holders of the company's 13% Senior Subordinated Notes and with a majority of the company's current equity holders on the terms of a transaction that, if completed, will result in the exchange of the company's $320 million of 13% Senior Subordinated Notes and $278 million of mandatorily redeemable preferred stock. These would be exchanged for a combination of shares of Pliant common stock and shares of a new Pliant preferred stock, which will not be subject to mandatory redemption, and $20 million of new debt. Completion of the exchange transaction is subject to a number of conditions, including definitive documentation and receipt of requisite approvals from the holders of the company's 13% Senior Subordinated Notes. The conversion of the subordinated debt would eliminate $41.6 million of annual cash interest payments. Harold Bevis, President and CEO, said, "This financial restructuring is a key pillar in the transformation of Pliant. We have been very successful in transforming our innovation programs, transforming our operational excellence programs, partnering with winning customers and key vendors, and bringing in a world-class executive team to lead the company. We have been hampered by the tremendous debt load on the company, including our mandatorily redeemable preferred stock which is classified as a liability on the company's balance sheet. We believe that this deal will fix the key final component and give us access to the free cash flow that we need to make Pliant the best flexible packaging company in the industry. We are very proud and happy with this new agreement. It is great for our vendors, our customers and our company. "We thank the members of the 13% noteholder committee and our shareholders for their cooperation in reaching this agreement and for partnering with Pliant's management team. We are confident in our business strategy and our direction. We believe that this deal will effectively remove a cap that we have had on our profit performance and reinvestment rates and enable us to optimize Pliant's performance." Separately, Pliant announced several new business wins in Personal Care & Medical, Food and Beverage packaging, and Industrial markets that will ramp up immediately and are expected to result in more than $50 million of incremental sales. "We are also pleased to have been selected as a supplier to the market leaders in the areas where we participate. These new business wins reflect the fundamental strength of our business and our outstanding reputation as a provider of value-added packaging products," Mr. Bevis concluded. Timothy Walsh, Partner with JPMorgan Partners, which is the majority shareholder of Pliant, said, "This deal is in line with our goal of helping Pliant be the best possible company over the long term. We are a total return investor and this is the right answer for Pliant." Anthony J. Smits, a partner at Bingham McCutchen LLP., which is serving as the legal advisor to the 13% noteholder committee, said: "The noteholder committee looks forward to quickly implementing this deleveraging so that Pliant can focus on business and growth opportunities on a stronger financial footing." Subject to the continued support of its trade creditors, the company intends to pursue completion of the exchange transaction through an out-of-court exchange offer that will be subject to, among other things, approval by the holders of 97% of the 13% Senior Subordinated Notes and approval by the company's preferred and common stockholders. If the company is unable to complete the exchange transaction through an out-of-court exchange offer, it intends to pursue the exchange transaction through a plan of reorganization in bankruptcy that would leave its trade and senior creditors unimpaired. Any such plan of reorganization would be subject to, among other things, approval by a majority of the holders of the 13% Senior Subordinated Notes that hold, in the aggregate, 66-2/3% of the 13% Senior Subordinated Notes and subject to bankruptcy court approval. If completed, the exchange transaction will result in substantial dilution to the company's current common stockholders and preferred stock holders. ABOUT PLIANT Pliant Corporation is a leading producer of value-added film and flexible packaging products for personal care, medical, food, industrial and agricultural markets. The Company operates 23 manufacturing and research and development facilities around the world, and employs approximately 2900 people. Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: All information set forth in this news release, except historical and factual information, represents forward-looking statements. This includes all statements about the company's plans, beliefs, estimates and expectations. Actual results may differ from these forward-looking statements due to numerous factors beyond our control. Those factors include, but are not limited to, our ability to timely complete negotiations and documentation of the proposed exchange transaction, obtain all requisite approvals and otherwise satisfy all conditions to completion of the proposed exchange transaction, as well as other factors discussed in more detail in our Annual Report on Form 10-K for 2004 and in subsequent filings with the Securities and Exchange Commission. Any forward-looking statements should be considered in light of these factors. # # # CONTACT Stephen T. Auburn General Counsel & Investor Relations E-MAIL: Steve.Auburn@pliantcorp.com Voice: 847.969.3319 Company Web Site: WWW.PLIANTCORP.COM EX-99.2 3 efc5-2511_exhibit992.txt Exhibit 99.2 SUMMARY OF PROPOSED TERMS This term sheet creates no binding rights or obligations in favor of any party. A binding commitment with respect to the transaction referred to below will result only from the execution of all necessary definitive documentation. This term sheet is for discussion purposes only. It does not constitute an offer to buy or sell any securities, nor shall it be construed as a binding agreement of any kind or a commitment to enter into, or offer to enter into, any agreement or to consummate any transaction.
Company: Pliant Corporation (the "Company") Transaction Structure(1): An out-of court exchange offer (with minimum 97% acceptance threshold), a "pre-packaged" Chapter 11 or a "pre-negotiated" Chapter 11. Revolving Credit Facility: Unimpaired 1st Lien Notes: Unimpaired 2nd Lien Notes: Unimpaired Trade and Other General Unsecured Unimpaired Creditors 13.0% Senior Subordinated Notes o The December 1, 2005 interest payment due (the "Old Notes"): on the Old Notes will be paid by the Company's issuance of $20.0 million in "tack-on" 1st Lien Notes(2) issued under the 1st Lien Indenture (the "Tack-On Notes") o Each holder of Old Notes who consents to the proposed restructuring (and votes in favor of a plan of reorganization that implements the proposed restructuring) will receive a cash consent fee equal to 1% of the principal amount of the Old Notes held by such holder (the "Consent Fee")(3)
- --------------------------------------- (1) Transaction structure subject to tax review (2) If (i) the restructuring is implemented through a Chapter 11 proceeding and (ii) the Bankruptcy Court determines that issuance of the Tack-On Notes to the Old Note holders would result in an impairment of the 1st Lien Note Holders or the 2nd Lien Note Holders, then the Company will issue to holders of the Old Notes, in lieu of the Tack-On Notes, new unsecured subordinated notes permitted by the 1st Lien Indenture and the 2nd Lien Indenture and in an amount reasonably equivalent to the face value of the Tack-On Notes. (3) If (i) the restructuring is implemented through a Chapter 11 proceeding and (ii) the Bankruptcy Court determines that payment of the Consent Fee would result in an impairment of the 1st Lien Note Holders or the 2nd Lien Note Holders, then the Series AA Preferred Stock will be split between holders of the Old Notes and holders of the Existing Series A Preferred 80% and 20%, respectively, and the Consent Fee will be eliminated.
o In addition to the Tack-On Notes, holders of the Old Notes will receive, in full satisfaction of the Old Notes, (a) $260 million of Series AA Exchangeable Redeemable Preferred Stock (77.5% of total Series AA), and (b) 30.0%(4) of fully-diluted (subject to management equity incentive compensation) Common Equity (following conversion of Series A Preferred into Common Equity) with remainder of Common Equity divided between Series A Preferred and Old Equity Series A Preferred and Old Equity: o The Existing Series A Preferred will convert into (a) $75.5 million of Series AA Exchangeable Redeemable Preferred Stock (22.5% of total Series AA), and (b) [TBD]% of new Common Equity o Existing Common Shares ("Old Equity") will remain outstanding and held by the current shareholders, but will be subject to dilution first from the Series A Preferred, and by holders of the Old Notes up to the point (in the latter case) that a change of control is not triggered. o Old Series A and Old Equity will receive, in aggregate, 70% of the new Common Equity. Management: o Existing Series B Preferred Stock held by management shall be extinguished and shall have no value. A new Series M Preferred Stock will be created to incentivize management to maximize the value of the restructured Company. The design of the Series M Preferred Stock will be substantially similar to the design of the Series B Preferred Stock, but with appropriate adjustments to reflect the modified capital structure. The Series M Preferred Stock will be entitled to 8% of the equity value of the restructured Company on a fully diluted basis.
- --------------------------------------- (4) Percentage subject to change to ensure change in control is not triggered
o One half of one percent (0.5%) of the equity value included in such management equity incentive program can only be distributed to management with the consent of the majority holders of the Series AA Preferred. Series AA Exchangeable Redeemable o $335.56 million liquidation preference Preferred Stock(4): o Dividends - PIK quarterly at 13% o Company may redeem at any time at principal plus accrued dividends. o Ability to force IPO after 3 years and sale of Company after 4 years o Ability of holders of a majority of the Series AA Preferred (excluding the Series AA Preferred held by holders of (i) Existing Series A Preferred, and (ii) Old Equity) to convert the entire Series AA Preferred to 99.9% of common stock if the Series AA Preferred is not redeemed within 5 years after issuance o Freely tradable at time of closing o Other customary terms and conditions Board Representation: Board of Directors to consist of seven members. Old Equity entitled to four Board seats. Senior Subordinated Noteholders entitled to two Board seats. CEO retains current Board seat.
- --------------------------------------- (4) Series AA Preferred Stock to be structured in such a manner that they are not considered debt for accounting purposes -----END PRIVACY-ENHANCED MESSAGE-----