BY Fraser Tennant
A victim of the freight industry recession in the US, commercial-truck parts manufacturer Accuride, along with a number of its US entities, has filed for Chapter 11 bankruptcy in order to facilitate the restructuring of its North American business.
The company’s liabilities are estimated to be between $500m and $1bn, according to the filing.
Accuride is the latest company in the US transport sector to file for bankruptcy this year amid overcapacity in the freight industry that is hurting both truckers and parts suppliers.
The company’s proposed restructuring, the result of extended negotiations with its lenders, will facilitate economic improvements for operations and significantly reduce funded debt from its balance sheet.
Accuride’s Mexican, European and Asian subsidiaries are not included in the Chapter 11 filing.
To ensure that it continues conducting its business in the ordinary course without interruption, Accuride’s lenders have agreed to provide $30m in debtor-in-possession (DIP) financing, which is structured to provide sufficient liquidity to continue normal operations and meet post-petition obligations to employees, suppliers and customers as they come due.
The DIP financing is intended to provide peace of mind to Accuride’s customers and suppliers and allow the company to maintain or restore normal trade terms with suppliers.
“Accuride’s reorganisation efforts are designed to create a healthier capital structure that will allow the company to remain a leader in the global wheel market,” said Robin Kendrick, president and chief executive of Accuride. “We anticipate a quick emergence from Chapter 11, with a de-levered balance sheet and improved capital structure.”
A leading supplier of wheel-end systems to the global commercial vehicle industry, Accuride’s products include steel and aluminium commercial vehicle wheels and wheel-end components and assemblies, as well as steel wheels for the European automotive and global agricultural, construction and industrial equipment markets.
Accuride is hopeful that it will be able to emerge from bankruptcy on an expedited basis, anticipated to be 90-100 days from the Chapter 11 filing.
Mr Kendrick concluded: “I am confident this reorganisation will give Accuride the financial flexibility it needs to grow its business and support its employees, customers and suppliers.”
News: Wheel supplier Accuride files Chapter 11 papers for U.S. operations