Food-service products manufacturer Radnor Holdings Corp. has received a huge infusion of funds to pay down debt and help fund new product development.
Tennenbaum Capital Partners LLC said it invested $120 million in Radnor. Through a combination of secured debt, preferred equity and warrants, Tennenbaum becomes Radnor's largest investor, although Radnor management will retain control of the company.
``This investment will help Radnor to optimize its capital structure and grow its business by introducing new products that meet the changing demands of its customers,'' Tennenbaum founder and senior managing partner Michael Tennenbaum said in a Dec. 1 news release.
Michael Kennedy, Radner chief executive officer, said his firm continually is rolling out innovative products, including those aimed at the hot-drink market, and that requires capital.
The thermoformer was able to attract extensive financing from Tennenbaum while the packaging market is in its most challenging environment in 20 years, Kennedy said in a telephone interview. Packaging companies are feeling squeezed by high raw material and energy costs.
A majority of the new injection of funds will redeem all Radnor's senior secured floating rate notes due in 2009, and will refinance certain other debt. The company's enhanced liquidity will support its expansion in food service and new product development. Tennenbaum partner Jose Feliciano joins Radnor's board of directors.
Radnor reported sales of $122.3 million for three months ended Sept. 30, up 1.7 percent from a year earlier. It operates 15 plants in North America and three in Europe.
Tennenbaum is a private investment firm based in Santa Monica, Calif., managing $3.7 billion in assets through private funds.