Hayes Lemmerz International has agreed with it its secured creditors to continue a restructuring program through a Chapter 11 bankruptcy filing which will lead to the lenders gaining substantially all of the equity in the reorganized company.
Hayes Lemmerz said that its goal is to reduce its corporate debt. A certain number of the creditors are supplying debtor-in-possession financing valued at USD 100 million, which will be converted to ownership stakes once the bankruptcy and reorganization are completed.
The voluntary bankruptcy filing includes the company plus certain of its US subsidiaries, along with Hayes Lemmerz Finance LLC Luxembourg SCA.
The company said that its operations will continue without interruption. It reports that the DIP loan together with its available resources provide liquidity of approximately USD 138 million.
Mr Curtis Clawson chairman & CEO of stated that "The Chapter 11 filings were precipitated by an unprecedented slowdown in industry demand and a tightening of credit markets. These filings will allow us to reduce our debt and restructure our balance sheet. We fully expect to emerge from Chapter 11 as a stronger, more competitive company than we are today."
Mr Clawson said that “day to day operations will continue uninterrupted. I want to personally assure our customers, suppliers and employees that we will continue to focus on being a premier automotive supplier by satisfying customers, being a low-cost producer and having the best people."
Hayes Lemmerz has been carrying out a restructuring of sorts for much of the past year. It closed an aluminum wheel plant in Gainesville in 2008 citing global overcapacity in the sector for light vehicle aluminum wheels, as well as a rising level of imports to North America from lower-cost production markets. It called that closing part of a strategy to continue to focus its business on the right products in the right geographic regions.
Hayes Lemmerz operates 24 plants worldwide, producing automotive and commercial highway wheels and powertrain components. Hayes Lemmerz produces aluminum and steel wheels for passenger cars and light trucks, and steel wheels for commercial trucks and trailers. It also manufactures automotive powertrain components.
