MORRIS MATERIAL Handling’s US operations have filed for Chapter 11 protection to allow it to continue to trade while its debt is reorganised. Operations outside of the USA are not affected.
Morris brought in financial advisers in February to explore options when it was clear that it was not going to be able to meet the terms of its bank credit agreements.
Attempts were made to sell the company but the consortium of banks that make up Morris’ bondholders have instead opted to exchange debt for equity. Instead of being lenders to the company, they will now become shareholders.
The financial problems stem from the debt burden taken on by Chartwell Investments which bought a majority stake in the company from Harnischfeger Industries in 1998. Morris made a net loss of $98m last year on sales of $294m.
Jack Stinnett, president and CEO, said: “We are confident that the Chapter 11 filing will allow the company to restructure its balance sheet and will result in a stronger, well-capitalised company… We are confident we can profitably re-grow our core business.”
