In a press release Monday, the maker of flooring products said the amendments to the 8.625% notes due 2008 are intended to give it more flexibility to proceed with certain steps and transactions in connection with its asbestos settlement negotiations.
Upon successful completion of these negotiations, Congoleum plans to file a prepackaged plan of reorganization under Chapter 11, which would incorporate the asbestos settlement and leave its bondholders, trade creditors and other non-asbestos related claim creditors unimpaired.
Adoption of the proposed amendments to the indenture requires bondholder consent representing a majority of the total principal amount of the outstanding notes as of the record date. Congoleum said a majority of the holders have agreed to the proposed amendments.
Congoleum is 55%-owned by American Biltrite Inc., a maker of plastic and fiber products.