Grede Foundries on November 5 announced that it has asked a federal bankruptcy court to approve a timeline for auction of the company, adding that it has reached an asset purchase agreement with an affiliate of Wayzata Investment Partners LLC of Minnesota which will serve as the “stalking horse” or opening bid in the auction.
Grede board chairman Richard Koenings said that there are also ongoing, active discussions with other potential bidders interested in purchasing the company. The purchase agreement with the affiliate of Wayzata – a manager of private investment funds with more than $5 billion in assets – will be the starting point for continuation of purchase discussions with other parties during the auction period over the next several weeks, he said.
“Additional parties have expressed a strong interest in purchasing our company, and our request to the court is the next step in the process that we expect will lead to a sale of the company to the highest bidder before the year’s end,” Koenings said. “The reorganization efforts we have undertaken in the last five months have strengthened our company and returned it to profitability, which has attracted the interest we have seen. The agreement with Wayzata and the setting of the auction schedule puts our organization in a strong position to emerge from bankruptcy by year end as we have targeted.”
Grede filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Western District of Wisconsin in June. In this latest filing, the company asks the court to hold a November 16 hearing on its timeline proposal. The proposed schedule calls for the auction to conclude by December 9 and for a closing by December 31, 2009.
“We anticipate there will be several substantive offers for the company, and our goal will be to get the best value possible,” Koenings said. “With the structuring changes we have made and continuing indications that the economy may be rebounding, this is an excellent time to move this process forward and to an appropriate and successful conclusion.
Koenings added that the Grede facilities in Greenwood, S.C., and Vassar, Mich., are not part of the sale package and would be sold independently. There are interested buyers for both the Greenwood property and the ongoing Vassar foundry operation, he said.
“This is a significant step forward, and we are pleased to have made this progress during the last several months,” Koenings said. “We would not be in this positive position but for the exceptional effort of every employee at every one of our facilities, under extremely challenging circumstances. We remain deeply committed to doing everything necessary to put the company on solid footing as the nation begins to rise out of the worst economic conditions since the Great Depression. When this process is completed by the end of the year, it will be beneficial for our customers, our employees, our vendors and the communities in which we operate.”
About Grede Foundries Inc.
Grede Foundries, Inc. was founded in 1920 by William J. Grede. The company specializes in ferrous metals: gray iron, ductile iron and specialty iron castings. Grede is headquartered in Milwaukee and operates eight foundries in the United States serving the automotive, heavy truck, appliance and industrial markets. Foundry locations are Milwaukee; Reedsburg, Wis.; Vassar, Mich.; St. Cloud, Minn.; Iron Mountain/Kingsford, Mich.; New Castle, Ind.; Wichita, Kan.; and Greenwood, S.C.
