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Dura's Long Run In Bankruptcy Is Over
Existing Dura shares have been cancelled and will no longer have value.
June 27, 2008
After more than a year-and-a-half in bankruptcy, Dura Automotive last week emerged from Chapter 11 protection.
As part of its exit, Dura has secured a $110 million revolving credit facility, a $50 million European first-lien term loan, and an $84 million US second-lien term loan. The automotive products company also inked various European accounts receivable factoring facilities totaling approximately $100 million.
The company said the exit financing facilities, along with cash from its balance sheet, will be used in part to finance distributions under the plan, providing cash to holders of DIP facility claims, administrative expense claims, certain priority claims, and Canadian general unsecured claims. Other creditors receiving distributions under the plan will receive new equity in the reorganized company to satisfy claims.
Existing Dura shares have been cancelled and will no longer have value.
“This transaction has significantly strengthened Dura’s capital structure by reducing total net debt from over $1.3 billion to approximately $180 million, which will significantly reduce the company’s interest expense,” said Nick Preda, Dura’s CFO.
As part of its emergence from bankruptcy, Dura also announced a new seven-member board of directors.
The company, ravaged by a difficult North American automotive market, filed for protection in autumn of 2006. Competitors such as Delphi and Dana have also sought out Chapter 11 protection. Dura designs and manufactures driver control systems, seating control systems, glass systems, engineered assemblies, structural door modules and exterior trim systems.
“We will now be able to operate with greater efficiency and flexibility, devoting all of the company’s focus and resources to developing and delivering innovative products to the benefit of our customers and all of our stakeholders,” said Dura’s chief executive, Larry Denton, in a press release.
Dura was advised by AlixPartners, Kirkland & Ellis and Miller Buckfire in connection with its Chapter 11 reorganization.
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