Cooper-Standard Gets Interim DIP Approval

After it announced at the beginning of the week its filing for bankruptcy protection, American automotive supplier Cooer-Standard Automotive received yesterday, together with its US and Canada subsidiaries interim court approval of their $175 million debtor in possession (DIP) financing.

The US Bankruptcy Court in Wilmington, Delaware and the Ontario Superior Court of Justice in Toronto granted Cooper-Standard to access to up to $50 million of the money, to be used for paying normal operating expenses and formulate and implement a restructuring plan. Additionally, the US court granted the supplier first day relief, including authority to pay employee wages and benefits as usual.

"The relief granted today ensures Cooper-Standard can continue to serve all customers without delay as the Company takes decisive steps to restructure its balance sheet," James McElya, Cooper-Standard Ceo said in a release. "Cooper-Standard's employees will continue to receive salary and benefits, suppliers will be paid on time during the bankruptcy case, and shipments will be delivered as expected."

"Perhaps most important, the Company's commitment to operational excellence will not be compromised. Cooper-Standard will continue to be a leader in innovation and technology in the automotive industry."

Following the negotiations between Cooper-Standard and its lenders, the supplier's balance sheet will be "significantly deleveraged", meaning it will be reduced from $1.1 billion of bank and bond indebtedness to approximately $350 million. The lenders also proposed an exit financing facility of $100 million to $150 million.

"Restructuring the Company's balance sheet to align with the new automotive marketplace is the right decision at the right time," McElya said when the supplier filed for bankruptcy.
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About the author: Daniel Patrascu
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Daniel loves writing (or so he claims), and he uses this skill to offer readers a "behind the scenes" look at the automotive industry. He also enjoys talking about space exploration and robots, because in his view the only way forward for humanity is away from this planet, in metal bodies.
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