Milacron Inc.'s debt clock keeps ticking down to a March 15 refinancing deadline - and as last week came to a close, the ticking began to reverberate like a bass drum going by in a parade.
``At this point, this is a waiting game,'' said Kevin Gale, a bond analyst who has been following the Milacron saga for McDonald Investments in Cleveland.
Milacron announced on March 11 that bondholders rejected an offer to convert debt to a major ownership stake - raising questions about the future of the beleaguered company, the largest U.S. maker of plastics machinery.
Milacron said it is ``continuing to negotiate'' with potential new lenders and investors. The company still is talking to individual bondholders.
The company's board of directors held a special meeting the evening of March 11 to consider proposals to refinance its debt.
``The proposals under consideration by the board include a counterproposal advanced by representatives of the ad hoc bondholder committee, as well as proposals made by various potential new lenders and investors with respect to both its short- and long-term financing options,'' Milacron said in a news release.
But as of early afternoon March 12, Milacron still had not issued a statement about the results of the shareholders meeting. The uncertainty that has dogged the Cincinnati-based company for months remained for employees, customers and holders of the company stock traded on the New York Stock Exchange.
Gale said March 12 that Milacron might wait to make an announcement until 5 p.m., the close of business, when its sale-of-receivables credit facility expires. But Milacron could get another extension on that.
That leaves March 15, when the company faces a deadline to repay nearly $170 million in debt. That includes $115 million in bonds and $54 million in revolving credit due right now, followed by another big bill in April 2005 for bonds totaling 115 million euros (currently $141 million).
Milacron has said it does not have enough cash to pay its debts. In its March 11 statement, officials indicated they want to refinance all the debt, including the 2005 euro bonds, at the same time.
Financial analysts said Milacron appears to have four options: convert bonds to stock, find a venture capital investor to pump in some money, issue high-yield junk bonds or file for Chapter 11 protection from creditors, which could be prepackaged to give bondholders some stock.
For months, company officials declined to give many details about their refinancing efforts. That lack of comment, and the deadline getting closer, led to speculation that bondholders were playing hardball with Milacron, as the U.S. plastics machinery market struggles to emerge out of a huge slump that started in 2000.
Milacron did spell out details of its failed offer in one of the March 11 statements. Milacron was offering to at least double the current amount of shares outstanding. Holders of U.S. notes and euro bonds would have exchanged their debt for $160 million in the aggregate principal amount of 9 percent of senior secured notes, which would have come due in 2009, plus 34.8 million shares of common stock. They would have rights for up to 21.5 million additional shares, contingent on the stock price on April 15, 2005.
The proposal also would have provided for $25 million in cash payments to bondholders.