According to court filings, the company has approximately $435 million in total assets, and approximately $483 million in total debts. UCI International was acquired by New Zealand-based Rank Group in 2010, owned by Graeme Hart, who is said to be New Zealand’s richest man with a net worth of $7.2 billion, according to Forbes magazine.
The bankruptcy filing does not relate to the company’s international operations or to affiliates Autoparts Holdings or FRAM Group Holdings.
The company is working with its lead bondholders, including funds managed by BlackRock, JP Morgan and Credit Suisse Asset Management, on the terms of a consensual restructuring. UCI said the filing is not expected to have an impact on the day-to-day operations of the company.
“Filing for Chapter 11 was a difficult decision, but the right one to reposition the company. Our business and our brands remain strong—we’re still investing capital, launching new products and offerings, hiring new talent to support our growth objectives and we have ample liquidity to operate our business,” said UCI’s General Counsel Keith Zar. The company continues to operate all of its manufacturing operations and provide the same product to its customers on a daily basis.
The June 2 rulings enable UCI and its subsidiaries, including Airtex Products LP, ASC Industries Inc. and Champion Laboratories Inc., to continue operations in the normal course including paying vendors for all post-petition goods and services, continuing all customer programs, and maintaining payroll and employee health benefits and other programs that are essential to continuing businesses without disruption.
“The motions approved today give UCI the ability to utilize our ample liquidity to fund operations going forward as we continue to negotiate a consensual restructuring with our key constituents,” said Zar. “We are committed to providing high-quality water pump, fuel pump and filtration products to our customers, be a great place to work for our employees and be a strong partner to our vendors just as we’ve always done.”
According to reports from the Wall Street Journal and Dow Jones Newswire, market influences such as lower-cost competition in China, the decline in U.S.-made vehicles, longer-lasting parts due to technological advancements and concentrated customer buying power impacted UCI’s decision to restructure its debt. The two media outlets also reported that the company was in the midst of issues with its two biggest customers, AutoZone and Advance Auto Parts, which is also having a significant financial impact on the company.
