MD Investors, a company formed by The Carlyle Group and Solus Alternative Asset Management, has acquired substantially all of Metaldyne’s assets.
MD Investors, a company formed by The Carlyle Group and Solus Alternative Asset Management, has acquired substantially all of Metaldyne’s assets.
Metaldyne, a wholly owned subsidiary of Asahi Tec, is a designer and supplier of metal based components, assemblies and modules for transportation related powertrain and chassis applications including engine, transmission/transfer case, wheel end and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry.
MD Investors has agreed to purchase most of the company’s assets under a 363 sale. Under US bankruptcy law, a 363 sale allows a sale of assets on a going concern basis prior to confirmation of a plan of reorganisation where a good business reason exists.
The sale is the result of a process commenced after the filing by Metaldyne and its US subsidiaries of voluntary petitions under Chapter 11 of the US Bankruptcy Code on 27 May.
"We are very pleased Carlyle, Solus, and a group of our term lenders have agreed to purchase substantially all of Metaldyne’s businesses," says Thomas A. Amato, chairman, president and chief executive of Metaldyne. "It has always been our plan to divest our better performing operations in connection with our overall Chapter 11 restructuring. We believe the sale of these businesses as a going concern represents the best way to continue to serve our customers and preserve as many jobs as possible."
Under the purchase agreement, MD Investors is purchasing the assets with a combination of cash, assumption of liabilities, a "credit bid" and other forms of valuable consideration. In particular, MD Investors is paying approximately USD40m in cash, assuming certain liabilities, including certain obligations to Metaldyne’s suppliers, and is credit bidding more than USD400m of secured term debt. MD Investors has also agreed to provide various other forms of valuable consideration to unsecured creditors.
The proposed sale transaction has the support of virtually all of Metaldyne’s stakeholders, including customers, other secured lenders, the committee of unsecured creditors and, of course, employees. Metaldyne hopes to consummate the sale in the upcoming weeks.
Metaldyne and its US subsidiaries filed for bankruptcy primarily as a result of liquidity, excess leverage and pension and lease costs compounded by the unusually low production volumes in the North American automotive industry.
