Injection molder Indesco International Inc. has reorganized under a new name, ContinentalAFA Dispensing Co., and new ownership after emerging from 14 months of bankruptcy protection.
The packaging company, a leading North American maker of plastic trigger sprayers and lotion pumps, had entered Chapter 11 bankruptcy protection to shrink a heavy debt burden from its balance sheets, said Chief Executive Officer Steven Bowsher.
The company had been unable to pay off a bond offering in 2000, Bowsher said. The company said at the time that its problems stemmed partly from lost business with a major customer.
A new equity offering, raising as much as $8 million in working capital, was made to strengthen its financial structure.
New equity owners include Chicago-based investment firm Chilmark Partners LLC, company executives and several minority partners. The reorganization eliminated more than $153 million in debt, with former bondholders taking an equity position with the company.
Now, ContinentalAFA wants to take advantage of its new burst of cash to continue internal growth, Bowsher said in an April 4 telephone interview. The company operates three plants in St. Peters, Mo.; Forest City, N.C.; and Costa Rica.
``We were limited in what we could do in new product introductions and developments because of Chapter 11,'' Bowsher said. ``Development of products has become a major focus for the business.''
The former Indesco had grown through acquisition before its debt load derailed its plans. In 1998, the company purchased the St. Peters-based Continental Sprayers division of Contico International.
Another subsidiary, the former AFA Products Inc. of Forest City, claims to have invented the trigger sprayer, made primarily from injection molded polypropylene. The company is the largest producer in North America of industrial trigger sprayers and among the leading suppliers of sprayers for consumer uses, Bowsher said.
The new name better reflects the company's heritage, Bowsher said. Its products are marketed under the AFA and Continental brands names.
As part of the restructuring, the headquarters has moved from Forest City to St. Peters, near St. Louis.
The company's reorganization plan was approved in early January by a bankruptcy court in New York. The bankruptcy did not affect ContinentalAFA's payments to suppliers, Bowsher said
``Through the entire bankruptcy, we never did have any financial problems,'' Bowsher said. ``It was all about the long-term debt the company had in bonds.''
Although Bowsher declined to offer sales figures, he said ContinentalAFA will be profitable in 2002. Before it entered bankruptcy, the company recorded sales of close to $100 million annually. About 400 employees work at its three plants.
The company also has an exclusive license agreement with another former subsidiary, AFA Polytek BV of Helmond, the Netherlands, to manufacture, develop and market each other's products. Indesco sold AFA Polytek in 2000 to Arbo Consult Nederland BV.