This time, auto industry supplier Metaldyne and its US subsidiaries filed for Chapter 11. As was the case with Visteon, the bankruptcy does not include off-shore operations, nor Asahi Tec Corporation, its mother company, just-auto.com reported.
Metaldyne filed two non-binding letters of intent to sell the majority of its assets under a court supervised process. So far, private equity firm RHJ International (majority shareholder in Asahi) and the Carlyle Group expressed their intention to buy Metaldyne's assets.
"Metaldyne believes that the decision of RHJI and Carlyle to step in and submit bids for the majority of the company's assets is a vote of confidence in its business and its employees," the metal-based components supplier said in a statement.
Asahi will no longer provide financial support for its subsidiary after the assets are sold. Up until now, the Japanese company helped Metaldyne shed a $400 million debt since 2007.
"Unfortunately, despite this significant debt reduction, the impact from the macroeconomic environment of declining industry volumes, a tight credit market and the uncertainty in the marketplace were simply too large to overcome without a broader in court restructuring," Thomas Amato, Metaldyne CEO was quoted as saying by the source.
The company came to today's decision despite the fact that for the past 17 months it has struggled to restructure outside the court. For now, Metaldyne has secured a $18.5 million debtor-in-possession financing from Deutsche Bank's New York branch to help it meet working capital requirements.
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