Buyers surface for Glenshaw Glass

A potential buyer for Glenshaw Glass Co. will meet with union representatives Monday to gauge their receptiveness, while another buyer who had been eyeing the company before September flooding temporarily damaged its furnaces has expressed renewed interest.

If the glass bottle maker is sold, however, it is almost certain that existing pension plans, which are already underfunded, will be scrapped, said an attorney close to the situation.

Five buyers are examining the plant, said Margaret Good, president of the Meridian Group, the court-appointed receiver installed by a county judge last week after the company's top creditor, PNC Financial Services Group, ousted previous management led by O'Hara businessman John Ghaznavi.

Included among the potential buyers is Boca Raton, Fla.-based leveraged buyout firm Sun Capital partners, which had been in talks with Ghaznavi prior to the Sept. 17 flooding. Sun officials could not be reached for comment Friday.

Lou Brudnock, president of Local 134 of the Glass, Molders, Pottery, Plastics & Allied Workers International Union, which represents 210 employees, said three potential buyers toured the plant yesterday.

"We have a very flexible and talented work force," he said. "We're willing to talk with any potential buyer."

Glenshaw Glass' largest labor groups on Wednesday narrowly rejected an emergency round of about $860,000 in interim concessions requested by Meridian.

Good said that while PNC is considering putting more interim funding into the plant to keep it operating until a buyer is found, the lack of concessions is putting her on a tighter time frame to get a deal done.

"Without the concessions our cash flow will be more negative, which reduces the chances to put together a transaction," she said.

Jim Watt, a staff representative for the United Steelworkers of America, which represents about 11 of the plant's 300 employees, said the cuts would be in place only until a new contract is negotiated with a buyer. His USW local approved the interim concessions package.

Good said she also spoke yesterday with Dennis Yablonsky, secretary of the state Department of Community and Economic Development, who pledged to have members of his department meet with her next week to examine possible state assistance to keep the plant from closing.

According to Meridian attorney Stanley Levine, the company has not made the past two scheduled payments to its pension plan, totaling $4.1 million. The total future unfunded liability for the pension is about $13 million, he said.

In October, Ghaznavi filed for a distressed termination of the plan with the Pension Benefit Guaranty Corp., which is pending.

Levine doesn't believe a buyer for the plant would want to assume pension liabilities.

Brudnock, of Local 134, said he would be surprised if the Pension Benefit Guaranty Corp. refuses to take over the plan, which typically pays lower benefits than previously promised by the employer.

600450 Buyers surface for Glenshaw Glass
Date: 15 November 2004

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