Key Plastics LLCs prepackaged Chapter 11 bankruptcy has received court and creditors approval, the company said in a release.
The plan, confirmed yesterday in U.S. Bankruptcy Court in Delaware, allows Key to convert $115 million in secured debt into equity, the company said. The supplier also will enter into a new $25 million credit facility.
Wayzata Investment Partners LLC, a Minnesota company that holds many of Key Plastics senior notes, will become Keys controlling shareholder. Wayzata will provide $20 million in new equity.
Key, of suburban Detroit, filed for bankruptcy Dec. 15, citing troubles stemming from collapsing auto sales and production. The company hopes to emerge from bankruptcy in mid-February, Key said.
In a prepackaged bankruptcy, the failed company and its debtors agree to key points of the planned reorganization before the bankruptcy filing, to allow the company to emerge from Chapter 11 quickly after court approval.
This bankruptcy is the second for Key Plastics, which makes plastic interior decorative trim, door handles, center consoles and other precision-molded plastics for North American, European and Asian automakers. After a March 2000 bankruptcy declaration, turnaround specialist B. Edward Ewing bought Key out of bankruptcy in 2001 with backing from the Carlyle Group, a Washington private equity firm.
Ewing later took full control of Key.
Keys restructuring efforts have included closing three of the 24 plants it had at the time of the latest filing. Most recently the company said it would close an exterior door handles plant in suburban Detroit on Feb. 20. The plants 137 employees will lose their jobs by April.
Key was one of eight major U.S. auto suppliers to file for bankruptcy protection in 2008. So far this decade, at least 57 major U.S. suppliers have filed bankruptcy petitions. Key is one of at least five suppliers to have filed for protection twice during the decade.