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Holcombe T. Green Jr. is in New York a lot these days negotiating with lenders of WestPoint Stevens Inc., and the company's survival may rest on whether he succeeds.
In many ways Green, 63, has come full circle since he pulled what was to become WestPoint Stevens Inc. (OTC BB: WSPT.OB) out of bankruptcy in 1992 by purchasing the bonds of its predecessor, WestPoint-Pepperell. Those bonds were later converted into millions of shares of stock and comprised about a third of all shares outstanding at one time.
But Green, the company's chairman and CEO, has watched his stake dwindle over the last 11 years. Much of it, pledged as collateral on loans, has already gone to creditors. The stock that remains closed April 22 at 35 cents per share.
The manufacturer of home furnishings and bath products is facing what is probably its biggest challenge since it emerged from the ashes of WestPoint-Pepperell.
WestPoint Stevens has nearly $1.8 billion in debt and limited cash. And the company and its customers, like Wal-Mart Stores Inc., Target Corp. and Kmart Corp., face a tough retail climate.
The West Point, Ga.-based company that aggressively bought shares back from stockholders at the cost of hundreds of millions of dollars between 1994 and 2001 struggles to remain viable as the textile industry has moved overseas in search of lower costs and higher profits.
Tough times for textiles
Lenders have given WestPoint Stevens until June 10 to comply with the terms of a $667 million line of credit. Without the extra time, the company would violate its agreement.
Its auditors have said they will issue a going concern qualification - accounting jargon for whether a company can continue to operate for another 12 months - if it fails to conclude negotiations favorably.
Meanwhile,...