Rayovac 2010 Annual Report Download - page 13

Chapter 11 Proceedings
On February 2, 2009, the Company did not make a $25.8 million interest payment due February 2, 2009 on
the Company’s 7
3
⁄ 8 % Senior Subordinated Notes due 2015 (the “7
3
⁄ 8 Notes”), triggering a default with respect to
the notes. On February 3, 2009, we announced that we had reached agreements with certain noteholders,
representing, in the aggregate, approximately 70% of the face value of our then outstanding senior subordinated
notes, to pursue a refinancing that, if implemented as proposed, would significantly reduce our outstanding debt.
As a result of its substantial leverage, the Company determined that, absent a financial restructuring, it would be
unable to achieve future profitability or positive cash flows on a consolidated basis solely from cash generated
from operating activities or to satisfy certain of its payment obligations as the same may become due and be at
risk of not satisfying the leverage ratios to which it was subject under its then existing senior secured term loan
facility, which ratios became more restrictive in future periods. Accordingly, the Debtors filed voluntary petitions
under Chapter 11 of the Bankruptcy Code, in the Bankruptcy Court (the “Bankruptcy Filing”) and filed with the
Bankruptcy Court a proposed plan of reorganization (the “Proposed Plan”) that detailed the Debtors’ proposed
terms for the refinancing. The Chapter 11 cases were jointly administered by the Bankruptcy Court as Case
No. 09-50455 (the “Bankruptcy Cases”). The Bankruptcy Court entered a written order (the “Confirmation
Order”) on July 15, 2009 confirming the Proposed Plan (as so confirmed, the “Plan”).
On the Effective Date the Plan became effective, and the Debtors emerged from Chapter 11 of the
Bankruptcy Code. Pursuant to and by operation of the Plan, on the Effective Date, all of Old Spectrum’s existing
equity securities, including the existing common stock and stock options, were extinguished and deemed
cancelled. Reorganized Spectrum Brands, Inc. filed a certificate of incorporation authorizing new shares of
common stock. Pursuant to and in accordance with the Plan, on the Effective Date, reorganized Spectrum
Brands, Inc. issued a total of 27,030,000 shares of common stock and approximately $218 million in aggregate
principal amount of the 12% Notes to holders of allowed claims with respect to Old Spectrum’s 8
1
⁄ 2 % Senior
Subordinated Notes due 2013 (the “8
1
⁄ 2 Notes”), the 7
3
⁄ 8 % Notes and Variable Rate Toggle Senior Subordinated
Notes due 2013 (the “Variable Rate Notes”) (collectively, the “Senior Subordinated Notes”). For a further
discussion of the 12% Notes see “Debt Financing Activities—12% Notes.” Also on the Effective Date,
reorganized Spectrum Brands, Inc. issued a total of 2,970,000 shares of common stock to supplemental and
sub-supplemental debtor-in-possession credit facility participants in respect of the equity fee earned under the
Debtors’ debtor-in-possession credit facility.
Our Products
We compete in seven major product categories: consumer batteries; pet supplies; electric shaving and
grooming; electric personal care products; home and garden control products; small appliances and portable
lighting. Our broad line of products includes:
• consumer batteries, including alkaline and zinc carbon batteries, rechargeable batteries and chargers
and hearing aid batteries and other specialty batteries;
• pet supplies, including aquatic equipment and supplies, dog and cat treats, small animal foods, clean up
and training aids, health and grooming products and bedding;
• home and garden control products including household insect controls, insect repellents and herbicides;
• electric shaving and grooming devices;
• small appliances, including small kitchen appliances and home product appliances;
• electric personal care and styling devices; and
• portable lighting.
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