Originally Published IVDT September 2002
INDUSTRY NEWS
Dade Behring files for Chapter 11
Dade Behring Inc. (Deerfield, IL) has finalized and implemented a debt restructuring plan through a prepackaged Chapter 11 filing. In August, the company reached a debt-to-equity swap agreement with its banks, bondholders, and owners that will eliminate about half of its debt and provide its creditors with equity in the company. Officials said that Dade Behring took the action to free up its business operations for increased growth momentum and long-term financial health.
Commenting on the company's filing, Jim Reid-Anderson, president and chief executive officer, said that the step was taken "after a comprehensive and thorough review of all of our options and with the full support of our bankers, bondholders, and owners. All of the parties involved agree that this is a valuable business with tremendous long-term prospects, which clearly should be protected."
According to company officials, the prepackaged Chapter 11 filing will have no impact on its day-to-day operations or affect its employees and customers. In order to meet its obligations, Dade Behring has arranged for debtor-in-possession financing, with an initial commitment of $95 million. The financing will allow the company to continue operating its business and serving its customers while implementing its debt-for-equity exchange.
The company does not expect the Chapter 11 filing to affect its ability to develop and release new products.
"We've committed to a substantial increase in R&D just this year, even while we're going through this process," says Mark Wolsey-Paige, senior vice president of marketing and business development at Dade Behring. "R&D spending has increased by 13% to a total of 9% of sales in 2002, and is targeted to increase to 10% of sales next year."
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