APC’s interim manager says potential buyers are looking to keep jobs, operations in AustinPublished 5:30am Monday, May 13, 2013
The man getting Austin Packaging Company’s finances back on track is confident one of several prospective buyers will strengthen the food packager’s operations and keep jobs in Austin.
“There’s an indicator that all the people who are interested, or remain interested, are the type of buyers who would want to maintain or expand operations here,” said Tony Natale of Shepherd Partners Inc. in Chicago. Natale is an interim manager (receiver) for APC, which means he has temporarily taken control of the company to stabilize its dire financial situation.
APC owners Jim Heimark and Jeff Thatcher filed for receivership — a way to avoid bankruptcy — on April 10, several weeks after shutting down the frozen pizza department and laying off 76 employees. Since then, Natale, APC owners and Wells Fargo Bank hashed out a plan, which was approved in Mower County Court, to sell the company’s assets and pay off its debts.
As of May 7, according to court documents, APC had a $2.9 million balance on a Wells Fargo line of credit, $1.9 million in unpaid equipment loans, along with trade creditors asserting claims for a total of $5.8 million as of April 30.
Natale said the company has been operating more efficiently in many aspects since the receivership was approved. About 160 employees still work at the company, and APC now focuses on manufacturing frozen and liquid foods, such as cheeses, gravy, Alfredo and Asian-flavored sauces.
“It’s going, actually, very smoothly,” he said. “It is stabilized from the standpoint of employees, supply chain, production.”
The next step will be to approve the sales procedure in Mower County Court on May 22, which will set guidelines for potential buyers before they submit their bids on June 17 and go to auction on June 19. Natale and attorneys will use the time before the auction to analyze potential buyers’ proposals and see if those are acceptable.
One prospective buyer has set the first bid at $5.6 million and agreed to assume various debts and obligations. Natale said each successive bid must be a half-million dollars more, as the auction is meant to bring the highest price for the company and its assets and help settle debts. After the auction, there will be a sales approval hearing on June 20 and an approximate closing date of June 24.
Natale was not concerned about the chance that nobody will buy APC. He said about 10 parties have been perusing private data about the company, with two to three of them expressing strong interest in buying.
“I’m highly confident that we are going to get multiple parties that show up at the auction and show interest,” he said.
Though names of those companies haven’t been released, Natale said the most interested buyers are with existing food distributors looking to strengthen their companies. And that’s good news for existing employees and those who may need jobs in the future.
“I think the outlook is extremely favorable for the community of Austin,” Natale said.