ANDERSON, IN – With the support of its shareholders, Remy Worldwide Holdings, has elected to begin voluntary proceedings for the company and its domestic subsidiaries, under Chapter 11 of the U.S. Bankruptcy Code.
"Today’s action enables us to efficiently restructure our debt and create a capital structure that will provide a foundation for future profitability," said John Weber, Remy’s chief executive officer. "Over the last several months, we have worked closely with our stakeholders to develop and now implement our plan to position Remy to meet the challenges of our industry."
During the reorganization process, which is expected to conclude within 60 days, Remy will continue normal business operations. The company anticipates that it will receive court authority to pay employee wages and benefits without interruption and continue to pay trade creditors and suppliers in the ordinary course of business. Remy’s international operations are excluded from the filing and will not be directly affected.
As previously announced, the key elements of the prepackaged plan include:
* Repayment of the company’s secured creditors in full;
* Raise $85 million in preferred equity through a backstopped rights offering to be made to holders of the company’s Senior Notes and Senior Subordinated Notes;
*Total debt reduction of $360 million through:
— Exchange of the company’s $145 million of existing 8-5/8 percent Senior Notes for $100 million of New Third-Lien Notes and $45 million in cash (plus an amount of cash equal to the accrued but unpaid interest through the filing date (estimated to be $10 million) and up to $2 million of new preferred stock in respect of post-petition interest). In addition, these noteholders will receive a $10 million consent fee for agreeing to the overall restructuring;
— Reduction of the company’s unsecured debt obligations by $315 million by converting the 9-3/8 percent Senior Subordinated Notes and 11 percent Senior Subordinated Notes into 100 percent of the common equity of the reorganized company; and
— Cancellation of all of the company’s existing equity interests.
As previously announced, Remy has obtained a binding commitment from Barclays Capital, the investment banking division of Barclays Bank PLC, to provide debtor-in-possession (DIP) financing for up to $225 million and up to $330 million of long-term exit financing.
"This is excellent news for our customers, suppliers and employees worldwide because it paves the way for a promising future for Remy and its long-term viability," said Weber. "We are extremely grateful for the support of all of our constituents and look forward to completing our financial restructuring in the coming months."
The company filed its voluntary Chapter 11 petitions and plan of reorganization in the U.S. Bankruptcy Court for the District of Delaware in Wilmington.
