AUBURN — The parent company of Pioneer Plastics Corp. is working on a deal with stockholders that will let the decorative laminate maker shed $151 million in debt.

Panolam Industries International has announced a tentative agreement with shareholders that would let the company restructure its debt and eliminate $16 million in annual credit payments.

Panolam bought Pioneer Plastics in 1999. The company makes laminates for bowling lanes, countertops and other items at plants in Auburn and Hampton, S.C.

Panolam, based in Shelton, Conn.,
operates other laminate manufacturing plants in Wisconsin, Oregon, Georgia, Tennessee and Ontario, Canada.

Many of Panolam’s profits are tied to the housing industry. The company laid off 48 employees — about 16 percent of its local work force — at the Auburn plant in December. Officials blamed the
layoffs on a downturn in the national housing industry.

According to Panolam’s financial filings with the Securities and Exchange Commission, the company posted $121 million in net losses in 2008 and $10 million in losses for the first quarter of 2009.

Stockholders filed a default notice in February. The company began negotiating with them to settle its debt and keep the company afloat.

According to a press release, all day-to-day operations at the company will continue as usual.

Officials at Pioneer Plastics Corp.’s Auburn plant declined to comment Thursday and directed all questions to Panolam Industries International in Connecticut.

Calls to Panolam’s financial and executive officers were not immediately returned Thursday. Calls to officials from majority stockholder groups Genstar Capital and The Sterling Group were not returned.

staylor@sunjournal.com