Accuride Restructures Debt, Files for Bankruptcy

The media team at Accuride Corporation have given details of a “debt restructuring agreement.” As part of this agreement the company is filing a voluntary petition for bankruptcy under Chapter 11 of the US Bankruptcy Code and has secured a US$50 million “debtor-in-possession” credit facility to enable normal business to continue.

Upon making the announcement on October 8, Accuride provided the reassurance that all of its operations will continue to operate in a “business as usual” manner. Furthermore, it states the company’s Canadian and Mexican subsidiaries are not included in the bankruptcy filing. The Accuride press statement expressed the hope the company will be “able to emerge from bankruptcy on an expedited basis with a confirmed plan of reorganisation.”

“Accuride’s debt restructuring efforts are designed to create a sustainable capital structure that will support greater profitability and solidify the Company’s position as the market leader in its product categories,” said Bill Lasky, Accuride’s president, CEO, and chairman of the Board. “Accuride expects to quickly emerge from Chapter 11 having rationalised its capital structure and de-levered its balance sheet. I believe this restructuring transaction maximises our financial flexibility and positions Accuride for future growth.”

As part of the debt restructuring plans, the company’s 8½ per cent senior subordinated notes will be cancelled and noteholders will receive 98 per cent of the reorganised Accuride’s common stock, subject to dilution. The reorganised Accuride will complete a $140 million rights offering of new senior unsecured convertible notes to current noteholders. The new notes will be convertible into 60 per cent of the common stock of the reorganised Accuride.

Accuride received US Bankruptcy Court approval on key “first day” motions on October 9. This permits the Chapter 11 filed company to, amongst other things, continue paying employee wages and benefits. Accuride is also allowed to immediately utilise $25 million of the debtor-in-possession loan granted by a number of its senior lenders and noteholders.