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World Kitchen Cooks Up Sale

World Kitchen, which makes glass and ceramic cookware under various brands including CorningWare and Pyrex, is looking for a new owner.

World Kitchen, which makes glass and ceramic cookware under various brands including CorningWare and Pyrex, is looking for a new owner. The company exited Chapter 11 bankruptcy in January 2003, with the largest stakes held by lenders including Oaktree Capital Management. Kohlberg Kravis Roberts & Co., which bought World Kitchen in a leveraged buyout in 1998, still holds a piece of the company.

A spokesman for WKI said it has received interest from multiple suitors, including private equity firms and strategic buyers. He said no timeline has been set and declined to name the bidders. "We thought it was the right time, we had positioned ourselves by improving our balance sheet," the spokesman said about the decision to sell. "It was never the intention of these financial institutions to be owners, it wasn't their long-term intention. But they felt that the market was right and our performance and our capabilities were right and our shareholders concurred." The company is being advised by Dresdner Kleinwort Wasserstein. He said the sale was not egged on by initial interest from a potential buyer.

At the time of its emergence the company's senior secured debt of approximately $577.1 million was exchanged for the payment of $27.8 million in cash and the issuance of $240.1 million of new senior secured term loans, $123.2 million of new senior subordinated notes and approximately 79% of new common stock. World Kitchen's $25 million revolver due to Borden Chemical, an affiliate of the company's primary stockholder KKR, was converted into about 11% of common stock. The company's 9 5/8% notes equaling $211.1 million were converted into the right to receive about 10% of common stock.

The company then entered into a new $75 million revolver and a $240.1 million senior secured term loan. JPMorgan leads this debt, which has recently traded in the 99-100 context. "We have taken a major step to improve both our balance sheet and our operating performance," said the spokesman. "We've disposed of some nonperforming assets, sold [the] OXO business which helped to dramatically reduce our debt." The company sold OXO to Helen of Troy for $275 million in May 2004.

The company started out as Corning Consumer Products Company, owned by Corning Incorporated, and was sold to Borden and KKR in 1998. In 1999, the two companies also purchased EKCO Housewares and General Housewares and wrapped the three companies under the guise of WKI Holdings. WKI filed for Chapter 11 in May 2002. A spokeswoman for KKR declined to comment. Howard Marks, chairman of Oaktree did not return a call.

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