Metaldyne Corporation has agreed to sell some of its powertrain and other operating assets and the stock of some foreign subsidiaries as going concerns to RHJ International (RHJI) under a court-supervised sale process under Section 363 of the US bankruptcy code.
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The sale is subject to bankruptcy approval procedures and the usual closing conditions including RHJI’s completing due diligence by 2 July, Metaldyne said.
“RHJI is uniquely positioned given their global automotive supplier holdings, commitment to the automotive industry, and operating company expertise,” said Metaldyne chairman, president and CEO Thomas Amato.
Under the agreement, a newly formed subsidiary of RHJI will purchase some 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 some Asian operations.
The transaction is valued at approximately $100m including up to $25m in cash, a new $50m secured note and the exchange of an existing EUR15m demand note issued by Metaldyne GmbH for a term loan to RHJI’s newly formed acquisition subsidiary.
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By GlobalDataRHJI has also 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, Niles Co and U-Shin.
“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.
Metaldyne filed for Chapter 11 bankruptcy protection in the US on 27 May but the filing did not include the company’s non-US 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 $18.50m to $19.85m. The DIP financing will be used to fund debtor operations as part of the bankruptcy process.
