Daily News: March 13, 2015

PNC Provides Chassix DIP Financing

Chassix Holdings 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. In particular, the plan will enhance the company’s financial strength and position it to move forward as a robust, well-capitalized global automotive supplier.

In conjunction with the restructuring, Chassix has received a commitment for a total of $250 million in debtor-in-possession financing in the form of a $150 million ABL 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.

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 U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Southern District of New York. Chassix’s operations outside the United States are not included in the Chapter 11 proceedings.

“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 CEO. “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. 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.”

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 filed 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.

Weil, Gotshal & Manges is serving as legal counsel, and Lazard Freres & Co. is serving as financial advisor to Chassix. FTI Consulting is providing interim management services to Chassix, including operational evaluation, business plan development and strategy implementation.

Chassix is a privately held automotive supplier of precision casting and machining solutions. The brand was launched in 2013 following the integration of the businesses of SMW Automotive and Diversified Machine.