By: Jim Rosenberg
Will close Reading plant, consolidate single-wide assembly
Upon signing a new, 250-million-dollar bank credit agreement, Goss Graphic Systems Inc. completed its capital restructuring Nov. 19 and emerged from its Chapter 11 bankruptcy under a reorganization plan approved Oct. 22 by the U.S. Bankruptcy Court in Delaware.
The Westmont, Ill., press maker’s new agreement consists of 150 million dollars in term loans and 100 million dollars in revolving credit. It replaces a 200-million-dollar bank agreement and interim financing provided by the company’s lenders and principal stockholder, Stonington Partners, when it initiated its prearranged bankruptcy proceeding.
As reported here earlier, the reorganization also includes Stonington Partners’ contribution of 50 million dollars in new equity capital and Goss Holdings Inc.’s exchange of 112.5 million dollars in senior subordinated notes for 225 million dollars principal amount of notes of Goss Graphic Systems. The new notes include a 21/2-year moratorium on cash interest, and noteholders will receive approximately one-third of the common stock in Goss Holdings.
Jim Sheehan, Goss chairman and CEO, called the new capital structure “more in line with the nature of our business” and said the lower debt and added liquidity are important to restoring profitability at Goss’ Americas unit. He also pointed to further cost reductions and efforts to “refine” the Goss product portfolio.
Marketing Director Barbara Gora said the last remark referred to understanding “which products have the strongest global appeal and then focusing on those.” She cited extensions to existing press lines as one example of other products that would be manufactured “by request.”
Goss also appointed two new members to its board of directors: Les Kraft, a former longtime Goss executive, and Tom Cochill, former president of WebCraft Technologies Inc., a commercial printer.
At the same time, Goss said it will transfer assembly of all single-width presses except the Universal line to its facility in Cedar Rapids, Iowa, beginning in January. It plans to close its Reading, Pa., factory.
Product lines moving to Iowa are the Goss Community, Magnum, Urbanite, and G18. All Universal production will be consolidated at Goss’ Nantes, France, facility, where it was developed. In the past year, Reading had taken on some manufacturing of the semicommercial single-wide presses.
When Reading ends its assembly operations by year-end, the facility will function as a warehousing and storage operation for approximately six months.
Goss called consolidation “a key component in ? efforts to streamline manufacturing processes.” The move follows an internal reorganization that put all worldwide manufacturing under Senior Vice President Matt Cribari. Sheehan said it will “strengthen our global operations by further aligning products to market demand.”
Consolidation of assembly in Cedar Rapids, Sheehan continued, should better enable Goss to meet customers’ needs “by reducing cycle times and accelerating global supply chain initiatives” and will allow integration of the “best practices across several product lines.”
(Editor & Publisher WebSite:http:www.mediainfo.com) [Caption]
(copyright: Editor & Publisher November 27, 1999) [Caption]