New buyers moved into Collins & Aikman bank debt on rumors there has been progress regarding a sale of the company, a trader said. A variety of distressed funds play in the name, he said. The rumors, however, did not cause much movement in the trading levels of the bank debt. The company's term loan "B" traded steadily in the 96-97 context. Collins' bonds traded up a couple of points. Its 10.75% '11 notes traded up to 29 1/8 from 27 1/2.
A company spokesman said he had not heard about progress on a sale. He reiterated the company remains on track to emerge from bankruptcy with the possibility that it will remain a standalone entity. It aims to emerge from bankruptcy by the end of September, said the spokesman. Collins is marketing portions, as well as all of its assets, to determine their market value for a potential sale, merger or equity infusion from investors. The spokesman said the company has not begun soliciting offers for the North American business. He added the company has just completed a five-year business plan, which it is sharing with potential buyers.
In January, Collins & Aikman's bonds fell on fears that a proposed joint venture between Lear Corp. and WL Ross & Co., which would combine Lear Corp.'s European interiors business with Collins & Aikman's European business, would fall apart. Bob Rossiter, ceo of Lear, told investors at the time that according to the way the joint venture is structured, the deal would probably not go ahead if Ross did not acquire Collins & Aikman's North American business (CIN, 1/16). Ross did not reply to an email seeking comment.