A federal court has approved of new owners taking control of the Appvion plant in West Carrollton.
The U.S. Bankruptcy Court in Delaware approved the sale of substantially all of Appvion’s assets to a group of its lenders led by Franklin Advisers, Inc., who is identified as the purchaser, the company said late Monday. The sale is expected to be completed by the end of May.
Last October, Appvion and some of its subsidiaries filed voluntary Chapter 11 cases.
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The purchaser offered a bid for the plant and other Appvion assets in February. In a release, Appvion said the total consideration is about $340 million plus the assumption of “substantial liabilities, including many of the company’s contractual obligations.”
The transaction will cut Appvion’s debt from about $585 million to less than $175 million and provide cash to run the company’s operations, Appvion said.
In Appvion’s statement, Kevin Gilligan, Appvion chief executive, said, “We are pleased to receive the court’s approval of the sale of our company to a group of our lenders who have been long-term supporters of Appvion. Their continued investment is a vote of confidence in the future of our business.”
However, the sale did not include assumption by the purchaser of Appvion’s employee stock ownership plan or its pension plans.
That plan will be terminated on completion of the sale and the outstanding shares of company stock will be “extinguished,” Appvion said.
The pension plans will be taken over by the Pension Benefit Guaranty Corp., a federal government agency that takes on pension plans abandoned or shed by companies in bankruptcy proceedings.
An Appvion spokesman said the West Carrollton plant, which has about 100 employees, will continue operating.
“The sale includes the West Carrollton plant,” Bill Van Den Brandt said in an email Tuesday. “The sale is good news for the company and will not result in changes to operations at our manufacturing locations, including West Carrollton.”
Appvion used to be Appleton Papers before changing its name in 2013. At the time, the Appleton, Wisc.-based company had about 100 workers at its 1030 W. Alex-Bell Road plant and several workers in Monroe. The local plant still has about 100 workers.