PLYMOUTH, Mich., July 27 /PRNewswire/ -- Metaldyne Corporation said today the U.S.
Bankruptcy Court for the Southern District of New
York has approved Hephaestus Holdings, Inc. as the stalking horse bidder for
most of its Powertrain operations and Revstone Industries LLC as the stalking
horse bidder for most of its Chassis operations. The auctions will be held in
early August.
Hephaestus Holdings, Inc. (HHI), a portfolio company of KPS Capital
Partners LP with other automotive holdings, has submitted a binding proposal for all
of Metaldyne’s Sintered Products, European Forgings and Vibration Controls
Products operations located in Europe, Asia, Brazil, Mexico and the U.S. In addition, HHI, through an
affiliate, has agreed to purchase the company’s Bluffton,
Ind.; Litchfield, Mich., and, subject to
certain conditions, the Twinsburg, Ohio,
plant. KPS Capital Partners will provide HHI with a significant additional cash
investment to support letters of credit and working capital needs of the Powertrain
businesses post closing.
HHI, through its Jernberg Holdings Inc., Impact Forge Group Inc. and
Kylos Bearing International Inc. subsidiaries, is a leading independent
manufacturer of forged parts and wheel bearings for the North American automotive industry.
The final auction date for the Powertrain sale is August 5, 2009. It will be held at the offices of Jones Day at 222 East
41st Street, New York, N.Y. Additional bids for
the company’s Powertrain operations are due by August
3, 2009.
Revstone, a private equity company, is bidding on the purchase of
Metaldyne’s chassis operations in Edon, Ohio; Greensboro, N.C.; Barcelona, Spain, and Iztapalapa, Mexico.
The final auction date for the Chassis sale is August 3, 2009. It will also be held at the Jones Day offices at 222 East
41st Street, New York, N.Y. Additional bids
for the Chassis business are due by July 31, 2009.
A stalking horse bid is a binding proposal on a bankrupt
company's assets from an interested buyer chosen by the bankrupt company. Once the stalking
horse is approved by the court other potential buyers may submit competing bids
for the bankrupt company's assets.
“I am very pleased we have identified stalking horse bidders for most
of our Powertrain and Chassis operations,” said Thomas
A. Amato, chairman, president and CEO of Metaldyne. “The industrial
logic between HHI and Metaldyne Powertrain as well as Revstone and Metaldyne
Chassis is sound. The Metaldyne operations being purchased have strong product
portfolios, advanced technologies and perform well operationally. We believe they
would be strong additions to their businesses.
“It is our plan to sell Metaldyne’s operations on a going concern
basis. We believe this is the best way to preserve as many jobs as possible, best
serve our customers and will allow certain of our operations to emerge from
bankruptcy as quickly as possible,” Amato said.
At the onset of Metaldyne’s bankruptcy process the company said
private equity firm RHJ International (RHJI) had submitted a non-binding letter of
intent to purchase certain portions of its Powertrain assets while The Carlyle
Group, also a private equity company, had submitted a non-binding letter of intent
to purchase portions of the Chassis operations. However, as part of the sale
process undertaken by Metaldyne’s advisors, the bids submitted by HHI and Revstone
presented better alternatives than other bids.
“We are pleased to have so much interest in our operations from such
well-respected companies,” Amato said.
Metaldyne is also seeking buyers for its Balance Shaft Module and its
Tubular Products businesses.
Metaldyne is a market leader in balance shaft modules. It has good
technology, a diverse customer base and growth potential. It currently supplies
components for the fuel-efficient I-4 engine. Balance shaft modules are produced at
Metaldyne’s plants in Fremont, Ind., and
Pyeongtaek, Korea.
The Tubular Products operations are housed at Metaldyne’s Hamburg, Mich., plant, which produces fabricated exhaust
manifolds and other tube-formed products.
Metaldyne’s Balance Shaft Module and Tubular businesses are being
marketed by the investment banking firm Donnelly Penman & Partners. Metaldyne’s
Powertrain and Chassis operations are being marketed by Lazard.
Metaldyne and its U.S. subsidiaries filed voluntary petitions in the United States Bankruptcy Court for the Southern
District of New York under Chapter 11 of the U.S.
Bankruptcy Code on May 27 primarily as a result
of liquidity, excess leverage, and pension and lease costs compounded by the
unusually low production volumes in the North American automotive industry. The
filing did not include the company’s non-U.S. entities or operations. Metaldyne
has a $19.85 million debtor-in-possession (DIP)
facility in place with agent bank Deutsche Bank AG, New
York, but funded by certain of Metaldyne's OEM customers.
“Overall we remain on track both in financial performance and in our
divestiture process,” Amato said. “I am confident Metaldyne’s better
performing operations will emerge from bankruptcy quickly. I am very proud of the hard
work and commitment of our employees to restructure the company and keep our
costs down without sacrificing safety, quality, and customer support.”
For access to certain court documents and other information about
Metaldyne’s Chapter 11 case, please visit www.metaldynerestructuring.com.
About Metaldyne
Metaldyne is a wholly owned subsidiary of Asahi Tec, a Shizuoka, Japan-based chassis and powertrain component supplier in
the passenger car/light truck and medium/heavy truck segments. Asahi Tec is listed
on the Tokyo Stock Exchange.
Metaldyne is a leading global designer and supplier of metal based
components, assemblies and modules for transportation related powertrain and chassis
applications including engine, transmission/transfer case, wheel end and
suspension, axle and driveline, and noise and vibration control products to the motor
vehicle industry.
Headquartered in Plymouth, Mich.,
Metaldyne had revenues in 2008 of approximately $1.57
billion. Metaldyne employs more than 4,400 employees at 33 facilities in 14
countries. For more information go to www.metaldyne.com.
Forward Looking Statement
This press release contains statements that are not statements of historical
fact, but instead are forward-looking statements, as that term is defined by the
federal securities laws. We caution readers not to place undue reliance on
these forward-looking statements, which reflect management’s expectations,
estimates and assumptions based on information available as of the date hereof.
Important factors that could cause actual results to vary materially from those
expressed or implied by the forward-looking statements are set forth in our Annual
Report on the Equivalent of Form 10-K for the fiscal year ended March 31, 2008 and our subsequent Quarterly Reports, and include:
our high degree of leverage; substantial restrictions in our credit facilities and
other debt; declining financial condition of our customers; risks associated
with the condition of our suppliers and subsequent availability of product;
adequacy of our liquidity to meet our obligations and grow our business; seasonal
fluctuations in our business and impact on working capital; our industry’s
cyclicality and dependence on general economic conditions; inability to achieve
profitability given our high degree of leverage and resulting interest expense;
affordability of raw materials and components; inability to quickly replace any
diminished or lost business due to the length of the sales process; risks related to
termination for convenience provisions in certain of our customers’ purchase
orders and unanticipated cancellation of programs by our customers; risks
associated with our parent company being controlled by a Japanese principal stockholder
and therefore being subject to the regulatory environment for publicly traded
Japanese companies; costs could potentially exceed estimates used in pricing our
products; our employee benefit obligations may negatively impact future liquidity;
risks related to international sales; inability to protect our intellectual
property rights; environmental compliance obligations and liabilities; inability to
meet obligations for any product liability and warranty claims; unanticipated
labor stoppages at our facilities or those of our customers; general economic
conditions in the market sector in which we operate, including continued volume
deterioration of our top three customers, changes in interest rates or foreign
currency exchanges; impact of the global financial crisis on our business and
liquidity; and potential consolidation, loss or insolvency of our customers. We do
not intend or assume any obligation to update any of these forward-looking
statements.
SOURCE Metaldyne Corporation