RathGibson posts $7 million loss

RathGibson Inc., a manufacturer of welded tubing products, reported a $7 million net loss in September on net sales of $17.3 million. The operating loss for the month was $3.8 million. Tax expense, interest, and depreciation aggregated $4.8 million.

The company was scheduled for an Oct. 16 confirmation hearing on the reorganization plan negotiated before the Chapter 11 filing with holders of 73 percent of the $209 million in senior unsecured notes.

The confirmation hearing was called off, with a new date to be selected in the future. The plan would have paid $6.6 million of unsecured creditors in full while noteholders received 82.5 percent of the new stock. Another 7.5 percent would have gone to the lenders for the reorganization.

The Lincolnshire-based company listed assets of $305 million against debt totaling $319 million. In addition to the $209 million in senior notes, debt includes $55.3 million on secured credit agreements and $10.4 million owing to trade suppliers. The holding company is also liable on $115 million in pay-in-kind notes.

A group including management and an affiliate of DLJ Merchant Banking Partners acquired control of RathGibson in June 2007.

The case is In re RathGibson Inc., 09-12452, U.S. Bankruptcy Court, District of Delaware (Wilmington).