Standard Automotive Corporation to Sell Truck Body/Trailer Division to U.S. Traffic Corporation
NEW YORK--June 3, 2002--Standard Automotive Corporation today announced that it has entered into a sale agreement with U.S. Traffic Corporation for the purchase of its Truck Body/Trailer Division, which consists of CPS Trailer Co., R&S Truck Body Company, Inc., Ajax East and Ajax West. To facilitate the sale, CPS Trailer Co. and R&S Truck Body Company, Inc. have filed voluntary petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Standard Automotive previously filed for protection under Chapter 11 on March 19, 2002 in order to commence a restructuring process to allow prospective buyers to evaluate its operations while business activities continued without interruption.
Under the terms of the sale agreement, Southern California-based U.S. Traffic Corporation will buy substantially all of the assets of the Truck Body/Trailer Division for the aggregate purchase price of $13.25 million, subject to higher and better offers.
John E. Elliott, II, Standard Automotive's chairman and chief restructuring officer said, "We are very pleased that the sale of the Truck Body/Trailer Division is well on its way. This sale represents a major step in accomplishing our restructuring goals. We have made continued progress toward maximizing the recovery to our creditors while ensuring the ongoing future of the various operating companies and their valued employees."
Through "first day" motions, CPS and R&S will request that the Court authorize certain actions, including, continuing wages and benefits to employees without interruption, and permitting CPS and R&S to continue honoring all warranty programs.
"Daily operations at the Company's Truck Body/Trailer Division and the other Standard Automotive subsidiaries will continue without interruption throughout the sale process. We anticipate the continued support of our vendors to meet the product needs of all our customers," Mr. Elliott added.
He also noted that Legg Mason Wood Walker, Inc., the Company's investment advisor, is still in the process of identifying a potential buyer or buyers for Airborne Gear & Machine Ltd., Arell Machining Ltd. and Ranor, Inc.
The Company also recognized that customers, vendors and employees' loyalty has been critical to the ability of the operating subsidiaries, including R&S and CPS, to continue delivering high-quality products during the restructuring.
Standard Automotive is a diversified company with production facilities located throughout the United States, Canada and Mexico. Standard Automotive manufactures precision products for aerospace, nuclear, industrial and defense markets, and it builds a broad line of specialized dump truck bodies, dump trailers, and related products.
The statements contained in this release that are not historical facts are "forward-looking statements" (as such term is defined in the Private Securities Litigation Reform Act of 1995). These statements include those describing the expected future operations of Standard Automotive Corporation and the expectations regarding the outcome of the financing and restructuring transactions described in this release. Management wishes to caution the reader that these forward-looking statements are only predictions and are subject to risks and uncertainties and actual results may differ materially from those indicated in the forward-looking statements as a result of a number of factors. These factors include, but are not limited to, risks associated with the company's ability to complete the transactions described in this release and those risks and uncertainties described from time to time in the reports filed by the Company with the Securities and Exchange Commission, including its Annual Report on Form 10-KA filed on July 27, 2001 for the fiscal year ended March 31, 2001 and in its Quarterly Report on Form 10-Q filed on February 19, 2002 for the quarter ended December 31, 2001. Other important factors that could cause actual events or results to be materially different from the forward-looking statements include the ability of the Company to continue as a going concern; court approval of the Company's first day papers and other motions prosecuted by it from time to time in the chapter 11 cases; the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the chapter 11 cases (or any significant delay with respect thereto); risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a chapter 11 trustee or to convert the cases into chapter 7 cases.