Atlanta-Spectrum Brands, which exited its growing media business in January (GM Nov. 24, p. 1), filed for Chapter 11 bankruptcy earlier this month in U.S. Bankruptcy Court for the Western District of Texas, San Antonio Division. Spectrum’s non-U.S. operations, which are legally separate, are not part of the proceedings. Spectrum failed to make a $25.8 million interest payment on its 7-3/8 percent senior note Feb. 2, triggering a default. However, Spectrum reports that it has reached agreements with noteholders, representing about 70 percent of the face value of its outstanding bonds, to pursue a refinancing that could reduce the company’s outstanding debt and put the company on a stronger financial footing. Spectrum said it could reduce the amount of debt by $840 million (one-third the company total) and eliminate about $95 million in annual cash interest payments for at least each of the next two years, freeing up additional cash for reinvesting in its three business segments ?Çô Home and Garden, Global Batteries and Personal Care, and Global Pet Supplies. Spectrum reports total debt at $2.6 billion. Spectrum reported a net loss of $112.7 million ($2.19 per diluted share) on sales of $564.2 million for the first quarter ending Dec. 28, 2008, versus a year-ago loss of $43.4 million ($.85 per share) on sales of $604.7 million. In the meantime, Spectrum has lost its place on the New York Stock Exchange and now trades with the symbol SPCB on the OTC market and on the Pink Sheet Electronic Quotation Service.
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