by Leslie J. Allen
Detroit Free Press Business Writer
SOUTHFIELD, MI — Federal-Mogul Corp. has amended its plan for emerging from bankruptcy to guarantee current shareholders the right to buy new shares in the reorganized auto supplier at a predetermined price.
Under both the former and amended plans, current shares would be voided once the company exits bankruptcy and new shares would be issued.
The Southfield, Mich.-based company announced its amended plan Friday in a filing with the U.S. Securities and Exchange Commission. It did not release terms of the warrants.
“The first plan did not have the support of the equity holders committee. Obviously we want to have a consensual plan as much as possible,” said Janet Halpin, director of investor relations.
Halpin said the warrant provision was the only major change to the reorganization plan, originally filed in March 2003.
A judge in Wilmington, Del., is to hold a hearing on the amended plan April 13 and 14. Shareholders and creditors then would vote on it. Halpin said a vote is likely several months away. The company is still planning to emerge from bankruptcy by the end of the year, Halpin said.
The company has about 87 million shares outstanding, and roughly 40,000 shareholders.
Under the reorganization proposal, 50.1 percent of the company will be owned by a trust set up to handle asbestos claims and 49.9 percent by creditors, such as billionaire financier Carl Icahn, in exchange for wiping out debt.
The company said Friday that Icahn’s High River Limited Partnership supports the plan, as do the unsecured creditors committee, asbestos claimants committee and other parties.
The maker of Champion spark plugs, Anco wipers and Wagner lights was forced to file for bankruptcy court protection in 2001 because it didn’t have enough money to settle lawsuits filed by people who said they were exposed to asbestos made by the British company T&N Plc, which Federal-Mogul bought in 1998.
Federal-Mogul had set aside $2.1 billion, including insurance, to handle asbestos claims, but it wasn’t enough for the half a million claims filed against it.
Fire damages center
In an unrelated matter, Federal-Mogul announced Friday that a fire had extensively damaged its Smithfield, Tenn., distribution facility. All employees were evacuated safely. The company is working on a plan to resume operations elsewhere late this week. The center employed 225.
Smithfield is the principal distribution site for Moog and TRW replacement chassis products in the U.S.
“Federal-Mogul is working hard to resume operations and lessen the impact on our customers and the community,” President and CEO Chip McClure said in a statement.
Copyright 2004 Detroit Free Press. All Rights Reserved.
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