GSI Debtholders Take Control In Restructuring
The precision technology company will go under hedge funds’ control as it reduces its debt.
November 20, 2009
GSI Group Inc.’s noteholders have taken control of the company in a restructuring plan that will substantially reduce the precision technology company’s debt.
Funds affiliated with Goldman Sachs Asset Management, Tennenbaum Capital Partners and Highbridge Capital Management will own the majority of the reorganized company's equity.
As part of the restructuring, three of GSI's corporate entities have filed for bankruptcy: GSI Group Inc., the parent Canadian holding company; GSI Group Corp.; and MES International Inc., a non-operating subsidiary of GSI Group Corp.
The company’s operating subsidiaries will be capable of paying debts going forward thanks to the restructuring.
The company exchanged $210 million of its 11% senior notes for $95 million in loans due August 2014 and surrendered about 74% of its equity. GSI’s overall debt will be reduced by $115 million as a result of its restructuring and equity surrender.
GSI Group was controlled until 2007 by Charlesbank Capital Partners, which bought the company in 2005 for undisclosed terms and announced plans for an “aggressive expansion of its business.” In 2007, it was sold again, to Centerbridge Partners, again for undisclosed terms.
When GSI was bought in 2005, Charlesbank and its founder, Craig Sloan, shared ownership. The ownership structure with Centerbridge was not made public.
GSI's legal counsel is Wilson Sonsini Goodrich & Rosati and Brown Rudnick; its financial and restructuring advisor is CRG Partners.
GSI Group supplies precision technology to the global medical, electronics and industrial markets and semiconductor systems.
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