Tower Automotive announced March 28 it has filed a restructuring term sheet with the U.S. Bankruptcy Court for the Southern District of New York to sell substantially all of its assets through a Chapter 11 plan to funds and accounts to be designated by Cerberus Capital Management L.P. The proposed transaction, among other things, provides for payment in full of obligations under Tower's Debtor-in-Possession (DIP) credit facility and second lien loan facility, assumption of the company's pensions, and certain recovery for unsecured creditors. Tower's Unsecured Creditors Committee supports the transaction and has signed the term sheet.
"We have accomplished a tremendous amount during the last few years to revitalize Tower so the company can strongly compete in today's global automotive marketplace," said Kathleen Ligocki, president and chief executive officer.
During its reorganization process, Tower diversified its customer portfolio, sold non-core businesses, consolidated the North American manufacturing footprint and negotiated settlements with all 10 U.S.-based labor unions to drive the profitability needed to attract new investment to the company.
"The recapitalization of the company is the last major milestone in our restructuring process. We are excited to have the support of an investor like Cerberus Capital Management, L.P., a group dedicated to investing in the automotive sector for the long term," said Ligocki.
The term sheet anticipates Tower will file a Chapter 11 plan by April 20. It also specifies a marketing process under which qualified parties may submit competing bids by June 15. If competing bids are received, the company proposes to conduct an auction on June 21 to determine the highest and best bid. The company would then ask the bankruptcy court to confirm Tower's Plan and approve a transaction on June 22, with a closing to occur by July 31.
Tower Automotive is a
global designer and producer of vehicle structural components and assemblies
used by every major automotive original equipment manufacturer, including BMW,
DaimlerChrysler, Fiat, Ford, General Motors, Honda, Hyundai/Kia, Nissan,
