Milacron Inc., working under Chapter 11 bankruptcy reorganization, could be sold by late June or July and potential buyers can bid on the entire plastics machinery maker or on individual parts of the company, according to court documents.
In the April 24 filing, the plastics machinery maker asks Judge J. Vincent Aug Jr. to approve bid procedures.
The deadline date of a court-run auction for Milacron, and the possible date of a sale, depends on how many and what types of bids come in for the company.
The preferred, or stalking horse bidders are two investor groups that hold 78 percent of Milacron's $225 million in senior notes due in 2011 Avenue Capital Group and DDJ Capital Management LLC. Both firms, which specialize in investing in distressed companies, have set up a new entity called MB LLC to buy all of Milacron.
The April 24 filing did not include details of the stalking horse offer, which forms the yardstick to evaluate any other bids.
A Milacron spokesman said the company would be issuing a news release soon that spells out the terms.
Milacron will solicit competing bids, and any sale has to be approved by U.S. Bankruptcy Court in Cincinnati. If any qualified bids come in, the court will conduct an auction to determine the highest and best offer to pay back creditors.
Milacron, based in Batavia, Ohio, listed total assets of $523.3 million and liabilities of $752 million.
Milacron filed for Chapter 11 on March 10, after facing a severe liquidity crisis by the end of February, according to the filing. The company cited the global economic downturn and credit crisis for severely reducing its sales. High oil and resin prices in 2007 and 2008, plus the shakeout of suppliers to the Big Three automakers also hurt.
Milacron manufactures injection molding presses, blow molding machines, extruders, D-M-E mold components, structural foam machines and industrial fluids.
Milacron leaders have not revealed their strategic plan to come out of bankruptcy. But in the April 24 request to Judge Aug, the company said other bidders may bid on some or all of the debtor's assets a move done to increase the number of parties that may be willing to participate in an auction process, the filing said.
The filing gives the following scenarios, subject to court approval:
* June 24 would be the deadline to get competing bids ironically the Wednesday of NPE2009. Milacron will exhibit at the show. If no other bids are received by then, Milacron will seek immediate court approval of the offer from the stalking horse bidder.
* However, if at least one qualified bid (other than the stalking horse bid) is received by that deadline, then other qualified bidders would have more time, until July 13, to make their offers, and an auction would be held July 17.
* If there is an auction and the stalking horse bidder does not end up as the successful bidder, then a sale hearing will be held by July 27. If that auction results in the stalking horse winning, then a sale hearing would be held by July 20.
If a competing bidder wins the auction, Milacron will pay a $4 million breakup fee and up to $2 million in expenses to Avenue Capital and DDJ Capital, according to court documents.
Milacron will advertise the sale notice in the Wall Street Journal.