LANCASTER, PA. — Institutional debt holders are negotiating with the plastic packaging producer Kerr Group Inc. in what a broker called ``a typical junk-bond deal.''
The holders again extended a waiver on financial covenants and maturity of some unsecured Kerr debt of $50.9 million, the company said. The holders acquired the debt in November, want to exchange it all for common stock, and granted extensions through Dec. 8, Dec. 31 and, now, Jan. 25.
Lancaster-based Kerr continues discussions with the holders but has no assurance of an agreement. The holders disagree with management's plan to restructure debt with secured credit from CIT Group Holdings Inc. and its conversion into preferred stock and subordinated debt. In connection with the waiver, Kerr withheld payment of a 42.5 cent-per-share dividend on class B of its series D preferred stock for the quarter ended Dec. 31. The dividend is accumulating.
In March, Kerr sold its consumer products business to Alltrista Corp. for $14.5 million. For the nine months ended Sept. 30, Kerr had sales of $80.5 million and a loss of $12.5 million.