By Christopher Scinta
Feb. 3 (Bloomberg) -- Spectrum Brands Inc., the maker of Rayovac batteries and Spectracide lawn-care products, filed for bankruptcy protection with agreement from most of its bondholders to trim debt.
The company listed assets of $10.1 billion and debt of $4.4 billion in papers filed today in U.S. Bankruptcy Court in San Antonio. Fewer than 10,000 creditors have claims against Spectrum, according to the court filing.
The company, which also makes Remington razors, Cutter insect repellent and Nature’s Miracle pet care products, said today in a statement that it reached agreements with noteholders representing about 70 percent of the face value of its outstanding bonds to pursue a refinancing.
“A refinancing on the agreed terms would enable Spectrum Brands to reduce the amount of debt on its balance sheet by approximately $840 million,” according to the statement.
U.S. Bank N.A. of St. Paul, Minnesota, was named as the largest unsecured creditor in its role as indenture trustee for more than $1 billion in bonds. Harbinger Capital Partners Master Fund I Ltd. was listed as the next largest creditor, though the amount of the debt was withheld in the court filing.
Spectrum Brands failed to make a $25.8 million interest payment due yesterday on its 7 3/8 percent senior subordinated notes due 2015, triggering a default, according to the company’s statement.
Bonds, Shares
Under the reorganization plan, the company will ask the court to approve, Spectrum would eliminate about $1.05 billion in existing bond obligations by issuing new bonds to current noteholders equal to 20 percent of the unpaid principal and interest on existing bonds. The noteholders would also receive shares of new common stock to be created under a reorganization plan, the company said in the statement.
The claims of existing secured and other general unsecured creditors would be unimpaired, while existing common stock would be canceled and shareholders wouldn’t receive any distribution, Spectrum said.
Spectrum Brands, based in Atlanta, is represented by attorneys at Skadden Arps Slate Meagher & Flom LLP. Perella Weinberg Partners LP is acting as financial adviser and investment banker. The matter was assigned to Judge Leif Clark.
The case is In Re Spectrum Brands Inc., 09-50456, U.S. Bankruptcy Court, Western District of Texas (San Antonio).