World Kitchen Inc., the maker of CorningWare and operator of a Pyrex bakeware plant in Charleroi, filed for bankruptcy protection Friday as part of an effort to restructure more than $800 million in debt.
Closely held World Kitchen, based in Reston, Va., said the proposed restructuring will reduce the company's debt from $812 million to $373 million. The company also plans to maintain normal operations during the reorganization process.
"It's business as usual for World Kitchen. This is not an announcement about going out of business," said David Lanzillo, spokesman for the company, yesterday.
He said employees will be paid in the normal manner, and all health and welfare benefit plans will continue without interruption. World Kitchen plans to fund ongoing operations during the Chapter 11 process with existing cash, cash flow from operations and up to $75 million in a new credit financing package by a bank group led by JPMorgan Chase Bank.
"This company simply has too much debt to fully execute its business strategy," said Steven G. Lamb, president and chief executive officer of World Kitchen, in a statement yesterday.
The Charleroi plant employs about 470 people, including about 400 hourly workers represented by Local 53 of the United Steelworkers, Aluminum Brick & Glass Division. Neither plant nor union officials could be reached for comment yesterday. World Kitchen also operates a distribution center in Greencastle, Franklin County, in southcentral Pennsylvania.
Three years ago World Kitchen embarked on an ambitious expansion project at the 109-year-old Charleroi plant — which included rebuilding an existing glass-melting tank and reconfiguring an existing production line to handle Pyrex measuring cup production that was shifted from a sister plant in Greenville, Ohio. The plant now has two glass furnaces with six manufacturing lines.
World Kitchen employs about 3,200 people companywide and has major manufacturing and distribution operations in the United States, Canada, South America and the Asia-Pacific region. The company is owned by New York investment firm Kohlberg Kravis Roberts & Co., whose Borden Inc. unit bought World Kitchen in 1998.
Lanzillo said World Kitchen hopes to emerge from the Chapter 11 bankruptcy process on an "expedited" timeline, but could not pinpoint how long it could take. "We're going to work as aggressively as we can. One thing that helps is that the parties representing 80 percent of debt are on board and support our reorganization plan," he said.
World Kitchen's debt is linked in part to its acquisition of kitchenware maker EKCO Group Inc. in 1999 for $310 million. The bankruptcy petition was filed in U.S. Bankruptcy Court for the Northern District of Illinois. HSBC Bank USA, which represents bondholders owed $200 million, is listed in court papers as World Kitchen's largest unsecured creditor.
