Providence, R.I. - Privately held Nortek has begun soliciting votes from
debt holders to approve a financial restructuring that would swap most of the
company's debt for equity.
Balloting ends Oct. 16, according to New York City-based
Financial Balloting Group, Nortek's balloting agent. If debtholders approve the
plan, Nortek will file Chapter 11 to get the approval of a bankruptcy court to
execute the agreement.
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Nortek owns multiple companies that sell products for commercial
and residential installation. In home technology, the company's brands include many
of the major powers in the residential custom-install industry, such as Aton,
Channel Plus, Elan, Gefen, Imerge, M&S, Niles, Omnimount, Panamax, SpeakerCraft,
Sunfire and Xantech. The company also owns residential HVAC and ventilation
companies and commercial HVAC suppliers.
If the plan
is approved, about $1.3 billion out of a total $2.05 billion in debt will be
eliminated, the company said.
Earlier this month, Nortek announced that a "substantial portion
of its bondholders" had already agreed to its planned restructuring, but those
bondholders did not yet include owners of $750 million in 10 percent notes due
in 2013. Under the planned restructuring, their indebtedness would either be
"reinstated," or it would be "modified" along with note holders getting "some
portion of the equity," a Nortek statement said.
Nortek has struggled
with servicing debt while revenues have fallen in the wake of the sharp decline
in residential and commercial construction.