Metaldyne Receives Court Approval to Access New Credit Facility
PLYMOUTH, Mich., May 30, 2009 -- Metaldyne Corporation today announced it has received court approval on its interim debtor-in-possession (DIP) financing motion which allows the company to access $18.5 million in new funding from Deutsche Bank AG, New York through funding commitments of certain Metaldyne customers. The DIP credit facility will be used for the company's normal working capital requirements, including supplier payments, employee wages and benefits, utility and lease payments, and other operating expenses during the reorganization process.
Metaldyne expects this financing facility will provide it with sufficient funding to complete the expedited sale of a significant portion of its assets.
As part of its Chapter 11 filing Metaldyne announced that RHJ International (RHJI) and The Carlyle Group, two well-respected private equity firms, have separately submitted letters of intent to purchase different portions of Metaldyne assets. RHJI has a majority stake in Asahi Tec, Metaldyne's parent company. RHJI has expressed interest in many of Metaldyne's powertrain related operations, including certain assets in its Sintered Products, Vibration Controls, European Components and Powertrain Products divisions.
Under the bankruptcy sale process, the proposed transactions are subject to execution of definitive purchase agreements, court approval and other customary conditions. Interested parties will have an opportunity to submit higher and better offers for Metaldyne's assets.
Metaldyne's restructuring plan has met with approval from many of its customers.
"Metaldyne is an important supplier to GM," said Bo Andersson, GM group vice president for Global Purchasing and Supply Chain. "We fully support Metaldyne's restructuring efforts."
In addition to the approval of the interim DIP Financing, the Honorable Judge Glenn of the U.S. Bankruptcy Court for the Southern District of New York also approved the balance of the "First-Day Motions" that Metaldyne filed as part of its filings for reorganization under Chapter 11 of the U.S. Bankruptcy Code.
"I am pleased that the Court approved all of our First Day Motions, including our interim DIP Financing motion," said Thomas A. Amato, chairman, president and CEO. "This was an important first step in our plan towards restructuring Metaldyne by divesting the company into primarily two new companies, one powertrain-focused and one chassis-focused."