The chairman of G. Heileman Brewing Co. Inc., the nation's fifth-largest brewer, said he expects the brewer to be out of bankruptcy by the end of summer.
Thomas J. Rattigan, who joined Heileman last week as chairman and chief executive officer, said the company should emerge from bankruptcy with "a serviceable level of debt that can be supported by the cash flow of the business."
Heileman, the latest victim of the leveraged-buyout era, filed yesterday for Chapter 11 reorganization under the U.S. Bankruptcy Code. The bankruptcy is not expected to affect any of the company's operations.
Rattigan said Heileman will be working closely with its suppliers to help guard their financial interests in the proceedings, and will immediately resume normal payment policies for goods and services provided after the filing of the petition.
"The company is very sensitive to its unsecured creditors and suppliers. We will do everything to accommodate them," said attorney Mitchel Perkiel of the New York law firm of Kaye, Scholer, Fierman, Hayes & Handler. The firm is representing Heileman's in the bankruptcy.
In a leveraged buyout, investors borrow heavily to buy out a company and then pay off the debt with the company's cash flow or the sale of its assets.
In its bankruptcy petition, Heileman listed assets of $1.24 billion and liabilities of $1.4 billion, according to Perkiel. "But nobody would pay $1.24 billion for Heileman's assets," Perkiel said.
Like other major companies, Heileman ended up in bankruptcy in an attempt to survive debt taken on in a takeover.
The La Crosse, Wisc.-based brewer, which has a major plant in Baltimore, was acquired in September 1987 for $1.26 billion by Australia's Bond Corp. Holdings Ltd.
The Baltimore plant, built in 1961, is located in Halethorpe and employs 400 workers who brew Colt 45, National Premium, National Boh and Champale.
Ironically, it was Heileman's solid position in the marketplace that caught the attention of Alan Bond, chairman of Bond, an Australia-based brewing, media and property conglomerate.