Wellman Emerges From Bankruptcy

After one year, plastics maker Wellman Inc. has emerged from bankruptcy as a privately held company.

Wellman has received $35 million in cash from the private equity firms Sola and Blackrock Financial Management in exchange for a 50% stake in the company. Creditors that have exchanged Wellman debt for equity will hold the remaining 50%. The company has already received a $35 million credit line from CIT Group.

"We are emerging with a strong financial foundation and sufficient liquidity to meet out customers' needs," Wellman Chief Financial Officer Keith R. Phillips says.

As part of its reorganization, the company exited the polyester fiber business and focused on polyethylene terephthalate (PET) resin, used to make soda and water bottles. The company closed its Darlington, S.C., fiber plant and sold its Johnsonville, S.C., polyester fiber and recycling operations to the private equity firm J. H. Whitney & Co. (C&EN, Nov. 24, 2008, page 19). Wellman's remaining plant, in Pearl River, Miss., has 960 million lb of annual PET resin capacity.

For the first three quarters of 2008, Wellman lost $54 million on $890 million in sales.