NEW HAVEN, Conn. — Proliance International today announced on July 2 that the company and its U.S. subsidiaries filed voluntary petitions in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 of the U.S. Bankruptcy Code to address liquidity needs and preserve the value of its business.
In connection with its filing, Proliance has entered into a definitive agreement to sell substantially all of its North American assets as a going concern for $21.5 million, in cash, subject to adjustment, under a court supervised sale process under section 363 of the U.S. Bankruptcy Code, to Centrum Equities XV, LLC, a Tennessee-based holding company, which includes the Visteon aftermarket business. The Visteon aftermarket business was spun off as an independent company in February 2008 from Visteon Corp. of Michigan and sold to Centrum Equities XV,LLC. Wynnchurch Capital, Ltd., a Chicago-based private equity firm, is Centrum’s financial partner in the Proliance transaction.
Charles Johnson, Proliance president and CEO said, “The filing and agreement we are announcing today represents the culmination of an exhaustive process to evaluate all available options to address the company’s liquidity constraints and is the only viable option after reviewing all alternatives to maximize the value of the company for stakeholders, to provide the best possible opportunity for associates and to provide that our customers’ needs going forward were met.
“The combination of Centrum’s resources and industry expertise and Proliance’s manufacturing and distribution capabilities will help get our business back on track faster and enable the combined company to serve its customers in an exemplary way,” Johnson said. “Longer term, we believe ownership by Centrum will create a stronger balance sheet and establish a solid platform which will provide opportunity for growth.”
Johnson explained the pressing need to access more capital to service customers weighed heavily in the company’s decision making. “As has been reported in our prior public filings, we have done everything possible to obtain a refinancing or to carry out our sale of the business since February 2008, when tornados destroyed our Southaven, MS warehouse and much of the inventory,” he said. “However, the condition of the financial markets has made it impossible to find a viable financing package outside bankruptcy.”
Roger Brown, president and CEO of Centrum Equities XV LLC said, “We are excited about this opportunity to put together these two leading companies in the automotive aftermarket. We strongly believe that the combination with Proliance, along with the financial investment to be made, will provide for unparalleled service in the industry.”
Proliance also announced that it has voluntarily requested the NYSE Amex Exchange to delist its common stock from trading on the NYSE Amex Exchange. This announcement follows the filing of voluntary petitions by the Company and its U.S. subsidiaries today in the U.S. Bankruptcy Court for the District of Delaware under Chapter 11 of the U.S. Bankruptcy Code. The Company does not currently intend to relist its common stock on another exchange as it expects there will be no recovery to the common stockholders upon completion of the bankruptcy process. The NYSE Amex Exchange had previously halted trading of the Company’s common stock on June 24.
The filing does not include Proliance’s non-U.S. entities or operations. Proliance is in the process of marketing its NRF subsidiary in Europe. The bankruptcy filing listed approximately $133.5 million of liabilities, including approximately $40.1 million under Proliance’s secured credit facility.
