Metaldyne Corp. filed for Chapter 11 bankruptcy late Wednesday and plans to sell most of its assets to two private equity firms.
Metaldyne, which posted revenue of about $1.57 billion in 2008, plans to sell most of its assets as going concerns to The Carlyle Group and RHJ International. Both firms have submitted letters of intent for the purchases to the U.S. Bankruptcy Court for the Southern District of New York.
The Chapter 11 filing comes after Metaldyne was told by parent company Asahi Tec Corp. of Japan that it would no longer continue its economic support for Metaldyne, according to a Metaldyne statement.
RHJ holds a majority stake in Asahi Tec.
We are grateful for the support Asahi Tec has provided since it purchased Metaldyne in 2007, particularly in connection with how Asahi Tec helped us to eliminate approximately $400 million of debt from our balance sheet, Metaldyne CEO Thomas Amato said in a statement.
RHJ plans to buy assets from Metaldynes vibration control and powertrain products business units in North America and Europe for up to $25 million in cash and about $70 million in other debt transactions.
Carlyle plans to buy assets from Metaldynes chassis business in the U.S., Mexico and Spain.
Metaldynes Chapter 11 will be funded by $18.5 million debtor-in-possession financing package from New York-based Deutsche Bank AG and Metaldynes customers, according to a company statement.
Metaldyne is a supplier of metal components, assemblies and modules for chassis and powertrain systems.
The company is the eighth automotive supplier tracked by Automotive News to file for Chapter 11 bankruptcy so far this year, following the filings of Visteon Corp., Hayes Lemmerz International Inc., Checker Motors Corp., Foamex International Inc., Fluid Routing Solutions Inc., Contech L.L.C., and Noble International Ltd.
Metaldyne, based in suburban Detroit, ranks No. 44 on the Automotive News list of the top 150 suppliers to North America with estimated North American sales to automakers of $1.02 billion in 2008.