Bankrupt Collins & Aikman Corporation, currently operating under the protection of US ‘Chapter 11’ bankruptcy laws, now expects to sell all of its operations, either in whole or in parts.
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This will, the vehicle interiors and convertible tops specialist said in a statement, “maximise the value of the enterprise for its creditors and preserve the largest number of jobs for its employees”.
Last 30 August, C&A filed a plan of reorganisation with the US regulatory authorities that proposed a framework for its emergence from Chapter 11 protection. Under the plan, the company’s pre-petition secured lenders were to exchange their debt for equity in a reorganised Collins & Aikman. The plan also allowed the sale process to continue as an alternative recovery strategy.
However, after recently announced production cuts by its major customers and a forecast deterioration in the US automotive sector, C&A, after consulting with major creditors, further analysed the risks and benefits of operating as a stand-alone enterprise and decided that a sale would provide the best return to the creditors.
“The valiant and successful effort put forth by C&A’s employees and restructuring team to stabilise operations must be commended,” said company president and CEO Frank Macher. “However, industry conditions have continued to deteriorate to a point that we have determined it was absolutely necessary for us to pursue a cooperative sale process to provide the maximum value for our creditors and preserve the largest number of jobs for our employees.”
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By GlobalDataC&A said it expects to consolidate or close more facilities in the near future and decisions will be based on buyer interest, taking into consideration projected capacity requirements, plant performance, and the operational restructuring and volume reduction measures recently announced by its largest customers.
“Despite the current environment, there are portions of our operations that have not only shown improvement but are operating at a level that should be very attractive for the right buyer,” added Macher. “We have maintained a dialogue with a number of interested parties throughout our reorganisation and feel pursuing this track is the best option available for all of our stakeholders, including employees, customers and creditors.”
