PLYMOUTH, Mich. — The U.S. Bankruptcy Court for the Southern District of New York has approved Hephaestus Holdings Inc. (HHI) as the stalking horse bidder for most of Metaldyne’s 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.
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.
Hephaestus Holdings, a portfolio company of KPS Capital Partners 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, 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 Aug. 5. Additional bids for the company’s Powertrain operations are due by Aug. 3.
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 Aug. 3. IAdditional bids for the Chassis business are due by July 31.
"I am very pleased we have identified stalking horse bidders for most of our Powertrain and Chassis operations," said Thomas 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.
"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."
