Metaldyne Corporation on June 16 announced it has signed an agreement to sell certain powertrain and other operating assets and the stock of certain of its foreign subsidiaries as going concerns to RHJ International (RHJI) under a court-supervised sale process pursuant to Section 363 of the U.S. Bankruptcy Code. The sale is subject to bankruptcy approval procedures and customary closing conditions for a transaction of this nature, including RHJI's finalization of due diligence which will occur by July 2, 2009.
"RHJI is uniquely positioned given their global automotive supplier holdings, commitment to the automotive industry, and operating company expertise," said Thomas A. Amato, Metaldyne chairman, president and CEO. "We are pleased to bring this transaction to the court for consideration."
Under the agreement, a newly formed subsidiary of RHJI will purchase certain North American and all of the European assets of Metaldyne's Sintered Products, Vibration Control Products and Powertrain Products business units, as well the European Forging Products business unit and certain Asian operations. The transaction is valued at approximately $100 million including up to $25 million in cash, a new $50 million secured note and the exchange of an existing euro 15 million demand note issued by Metaldyne GmbH for a term loan to RHJI's newly formed acquisition subsidiary. In addition, RHJI has agreed to inject additional cash into the newly formed entity to fund future working capital needs.
RHJI's other global automotive holdings include Asahi Tec Corporation (Metaldyne's parent company), Honsel International Technologies SA, Niles Company Ltd., and U-Shin Ltd.
"The Metaldyne operations being purchased have strong product portfolios, advanced technologies and perform well operationally. The new powertrain-focused company RHJI is creating will be a solid supplier to the restructured global automotive industry," Amato said.
As part of its May 27 Chapter 11 filing, Metaldyne entered into a letter of intent with RHJI to sell certain portions of Metaldyne's assets as ongoing concerns. Metaldyne filed its voluntary petitions in the United States Bankruptcy Court for the Southern District of New York under Chapter 11 of the U.S. Bankruptcy Code. The filing did not include the company's non-U.S. entities or operations.
The company also announced that additional funding from two original equipment customers increased the availability of its debtor-in-possession (DIP) financing from $18.50 million to $19.85 million. The DIP financing will be used to fund debtor operations as part of the bankruptcy process.
For access to certain court documents and other information about Metaldyne's Chapter 11 case, visit www.metaldynerestructuring.com.
About Metaldyne
Metaldyne is a wholly owned subsidiary of Asahi Tec, a Shizuoka, Japan-based chassis and powertrain component supplier in the passenger car/light truck and medium/heavy truck segments. Asahi Tec is listed on the Tokyo Stock Exchange. Metaldyne is a leading global designer and supplier of metal based components, assemblies and modules for transportation related powertrain and chassis applications including engine, transmission/transfer case, wheel end and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry. Headquartered in Plymouth, Mich., Metaldyne has annual revenues of approximately $1.57 billion. Metaldyne employs more than 4,400 employees at 33 facilities in 14 countries.
