Zodiac Pool Solutions clarifies filing question

Zodiac Pool Solutions has moved to clarify a situation they believe may be causing some confusion relating to a series of loan extensions in England, which in turn led to a filing in the US.

In a statement issued by Zodiac Corporate Relations in the United States, the company said the filings will have no negative impact and are similar to refinancing a loan with the same lender.

The confusion may have come about by some financial news services sending out alerts with scant detail.

“On July 31, 2014, it was reported that Zodiac Pool Solutions SAS, and several of its subsidiaries had filed for protection under Chapter 15 of the United States Bankruptcy code. Zodiac would like to thank the news services for their brief coverage of the filing and clarify several facts, in plain English, for the 99 per cent of our valued customers and suppliers who (like us) may not be experts in such things," Zodiac said in a statement.

“The most important point to understand is that these filings will have no negative impact on our customers, suppliers or employees.

“Zodiac is not seeking to liquidate the company (which is typically done under Chapter 7 of the Bankruptcy Code), or restructure our debts (which is typically done under Chapter 11 of the Bankruptcy Code).

“Instead, Zodiac Pool Solutions SAS and its subsidiary companies have asked our financial lenders to change some of the terms of the loans they made to us in 2007 when The Carlyle Group and company management bought the company. The primary change is to extend the dates that the loans are due to be repaid to our lenders (similar to refinancing your mortgage with the same lender – but with about 30 lenders).

“We did this because we, as managers and owners, believe we will continue to grow the company in the future and it is in their best interest (and ours) to extend that debt. We proposed these changes through a legal process in the UK (because our debt is issued under English law).

“It is also important to note that the proposal relates only to our financial lenders included in that legal process. This proposal does not involve our many valued trade suppliers and other third parties, whose rights are not altered by the changes. As an aside, the changes we proposed to our financial lenders were overwhelmingly approved by the affected lenders, and were subsequently sanctioned (i.e. approved) by the court in London.

“We are extremely pleased with the widespread lender support of the changes, which demonstrates their confidence in Zodiac's businesses and prospects.

“Although the changes were approved by the English court, Zodiac also felt that it was best to make sure that the changes would be legally binding in the US. Zodiac determined that the best way to do that would be to file with the court under Chapter 15 of the US Bankruptcy code, which allows changes like this to be recognized in the US legal system.

“Although this is a procedure under the US Bankruptcy Code, it is not an insolvency procedure. The US court is simply being asked to recognize and give effect to the changes that were approved by the lenders and the English court. Regrettably, the negative perception and press that often comes with this type of filing can overshadow the very positive outcome.”

In summary, Zodiac said they believe this is a very positive move for the company, their customers, suppliers, employees and lenders, whom they wish to thank for their continued support.

“We look forward to continuing our strong tradition of leadership in the global pool care industry.”

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