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PNC, Others to Provide $250MM DIP Loan in Chassix Chapter 11 Filing

March 13, 2015, 07:55 AM
Filed Under: Bankruptcy

Chassix Holdings, Inc. announced that it reached agreement with 80% of its unsecured bondholders and 71.5% of its senior secured bondholders, its existing sponsor, and all of its largest customers regarding the terms of a comprehensive restructuring and recapitalization of the Company (the “Plan”).

Among other things, the Plan provides for a debt-for-equity swap that will significantly reduce the Company’s outstanding bond debt and debt payment obligations. Chassix intends to implement the Plan in conjunction with a pre-negotiated and fully documented restructuring support agreement and plan of reorganization.

To implement the Plan, Chassix and its U.S. subsidiaries today voluntarily filed for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. Chassix’s operations outside the United States are not included in the Chapter 11 proceedings.

In conjunction with the restructuring, Chassix has received a commitment for a total of $250 million in debtor-in-possession financing (“DIP Financing”), in the form of a $150 million asset-based-loan from PNC Bank that will replace its current ABL facility and an incremental $100 million of liquidity in a term loan provided by certain of the Company’s bondholders. Upon Court approval, this financing, combined with cash generated by the Company’s ongoing operations, will be available to Chassix to meet its operational and restructuring needs. In addition, certain of the Company’s bondholders have committed to make an additional $50 million in financing available to the Company at emergence from Chapter 11.

“Chassix has been working diligently to address challenges that have impacted the Company’s profitability and cash flows in recent months,” said Mark Allan, Chassix Chief Executive Officer. “The actions we are announcing today represent the culmination of those efforts. The agreement we’ve reached with our bondholders, customers and other parties is intended to strengthen Chassix’s financial condition as we continue to implement operational improvements that will enhance production, improve cash flows and better position us to support the significant demand for our products.”

Allan continued, “Our operations in the United States and around the world are open and conducting business in the ordinary course. Our top priority continues to be providing our customers with the high-quality products and service they have come to expect from Chassix. The senior management team and I greatly appreciate the loyalty and support of our employees, whose dedication and hard work are critical to our success and integral to the future of Chassix.”

Chassix iled a proposed plan of reorganization and disclosure statement with the bankruptcy court, along with various “First Day motions” to support its reorganization and the uninterrupted continuation of its business.Chassix represents a $1.4 billion, privately held automotive supplier of precision casting and machining solutions.

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