Exhibit 99.1
News Release
AMF BOWLING WORLDWIDE FILES VOLUNTARY CHAPTER 11 PETITION
TO FACILITATE MAJOR FINANCIAL RESTRUCTURING
$75 Million Debtor-in-Possession Financing Arranged
All Bowling Centers and Manufacturing Facilities Open And Conducting
Business In the Ordinary Course
Richmond, Virginia, July 3, 2001 - AMF Bowling Worldwide and its U.S
subsidiaries today filed for reorganization under Chapter 11 of the U.S.
Bankruptcy Code. The filings, in Richmond, Virginia, will enable AMF to maintain
ordinary course operations while it finalizes and implements a reorganization
plan to significantly reduce its long-term debt and interest expense.
AMF announced in April that it would likely take this action in order to
facilitate an orderly financial restructuring. The company has reached an
agreement in principle with the steering committee of its senior lenders on a
new capital structure and the terms of a plan of reorganization. AMF expects to
submit this plan and a disclosure statement in early August after the approval
of the agreement in principle by the requisite majority of its senior lenders.
The plan of reorganization will reduce outstanding debt and provide improved
financial flexibility for AMF.
Debtor-in-Possession Financing Arranged
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Members of AMF's current senior lending group have agreed to provide the
company with a $75 million debtor-in-possession financing facility, subject to
court approval that is expected later today. These funds will be available to
supplement the company's operating cash flow for funding business operations,
including payment under normal terms to suppliers and vendors for all goods and
services that are provided to the company during Chapter 11.
AMF Conducting Business in the Ordinary Course
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Roland Smith, AMF's President and Chief Executive Officer, noted that the
court filing is not expected to have any significant impact on AMF's day-to-day
operations: "We will continue welcoming customers at our bowling centers, and we
will continue to make and sell our bowling products. While the refinancing will
be an important step towards a more successful future, our primary focus will
continue to be our customers and their satisfaction with our products and
services."
All 518 of the company's bowling centers around the world remain open and
will be conducting normal business operations. League play and all other
activities at the bowling centers, such as corporate parties and special
promotions, will continue as planned. All three of the company's manufacturing
facilities are open and will operate on regular schedules.
Proposed Reorganization Plan
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Under the terms of the plan to which AMF and the steering committee of
senior lenders have agreed in principle, the senior lenders will receive a
combination of cash, debt and common stock of the reorganized company. Based on
a hypothetical reorganization value of $700 million, these distributions will
provide payment in full to the senior lenders for their secured claims of
approximately $625 million. Unsecured creditors will receive the remainder of
the reorganized company's common stock, as well as warrants to purchase
additional shares. The reorganized company will implement a management stock
option program tied to the company's future performance.
AMF Bowling Worldwide will not make a distribution to AMF Bowling, Inc.,
the parent company. As a result, while AMF Bowling, Inc., has not yet filed for
Chapter 11 protection, it is expected that the common stock and the zero coupon
convertible debentures of AMF Bowling, Inc. will ultimately be cancelled.
The details of AMF Bowling Worldwide's proposed capital structure will be
contained in a plan of reorganization and a disclosure statement that the
company expects to file with the court in early August. The plan and the
disclosure statement are subject to the approval of the creditors and the
bankruptcy court.
"We have negotiated a plan of reorganization with the bank group steering
committee that will position AMF for long-term success," said Smith. "We intend
to use this court-supervised process to implement a plan of reorganization that
reduces our long-term debt and interest expense and allows us to redirect our
operating cash flow toward more productive uses. At the same time, we will
continue to implement our strategic business plan, which is focused on improving
operations in the future."
Strategic Changes Continue at AMF
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"Over the past year, we have implemented a number of actions to strengthen
AMF's business operations and enhance financial performance," said Smith. "While
AMF continues to generate positive cash flow from operations, today's court
filing is a necessary step in the refinancing process to make AMF a stronger,
financially sound company in the years to come."
During the past year, AMF has made a number of strategic personnel and
organizational changes in both its Centers and Products businesses. These
changes included initiatives that streamlined the U.S. Bowling Centers'
organization and instituted a new operating model focused on the bowling center
manager. In conjunction with this model, the company created new training
schools for center and facility managers and also established new performance-
based compensation and benefits programs for center managers and staff. John
Suddarth, the new Chief Operating Officer for Bowling Products, began
implementation of organizational changes in May to reduce costs and improve both
product quality and customer service. Upon completion of the operational
turnaround currently underway, the company believes that its Products business
will be positioned to deliver improved results.
Mr. Smith emphasized that AMF remains committed to long-term growth of its
business in the U.S. and its global markets: "Bowling is fundamentally a good
business. With almost 54 million Americans bowling at least once last year, it
is the largest participatory sport in the U.S. Around the world, we estimate
that over 100 million people in 90 countries went bowling last year."
AMF
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As the largest bowling company in the world, AMF owns and operates 518
bowling centers worldwide, with 400 centers in the U.S. and 118 centers in ten
other countries. AMF is also a world leader in the manufacturing and marketing
of bowling products. In addition, the company manufactures and sells the
PlayMaster, Highland and Renaissance brands of billiards tables. Additional
information about AMF is available on the Internet at www.amf.com as well as on
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a new toll-free AMF Refinancing Hot Line at 866-743-2625.
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