Supplier Chassix buys times with debt holders
DETROIT (Bloomberg) -- Chassix Inc., the auto-parts maker owned by billionaire Tom Gores’ Platinum Equity LLC, said its bondholders agreed to refrain for a month from pursuing a default after the company missed an interest payment.
The company said certain debt-holders agreed to a forbearance until April 4, according to a statement released late Wednesday. Chassix’s 30-day grace period on the missed interest payment of about $17 million ended Tuesday.
“Chassix intends to use the additional time to continue constructive discussions with representatives of the company’s lenders and noteholders, along with its major customers, to finalize a comprehensive plan that is intended to enhance the company’s financial strength,” the company said in the statement.
The supplier of chassis, brake and powertrain components did not make a scheduled payment twice since December on $525 million of bond debt it carries.
Executives of Chassix, a supplier to carmakers including General Motors and BMW, began examining options to reorganize debt or sell assets in November when they ended a call explaining an unprofitable quarter to investors by saying they’d hired three restructuring advisers. Chassix was exploring a sale of some of its U.S. plants, people with knowledge of told Bloomberg in February.
Crain's Detroit Business, an affiliate of Automotive News, reported on the company's troubles earlier in February.
At the time, sources familiar with the situation said Ford Motor Co., GM, and other automakers have been working with Chassix since September to accelerate payments and make financial accommodations to keep it operating, or monitoring the health of its trade creditors, to avoid a supply interruption.
Talks with bondholders are focused on negotiating a pre-packaged bankruptcy plan that would give much of the control of the company to creditors, two people with knowledge of the matter told Bloomberg Wednesday.
The lender of its revolving credit line also agreed to the forbearance, according to the statement. The manufacturer borrowed nearly everything available on its $150 million revolving credit facility to get cash, two people with knowledge of the company’s finances told Bloomberg in November.
Michael Freitag, a spokesman for Chassix, declined to comment beyond the press release. Dan Whelan, a spokesman for Beverly Hills, Calif.-based Platinum Equity, also declined to comment.
Gores also owns the NBA's Detroit Pistons.
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