Graeme Hart's UCI files for bankruptcy over $US400m debt
US car parts maker missed interest payment in February.
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Billionaire and NBR Rich Lister Graeme Hart’s US car parts maker UCI has filed for bankruptcy protection saying it needs to “deleverage the company and better position the company for future growth.”
US court filings indicate the group’s main debt is $US400 million ($587 million) of 8.625% notes due for repayment in 2019, plus accrued interest.
In February, UCI missed a $US17.25 million scheduled interest payment on the notes and in March agreed a one-month grace period while it entered discussions with noteholders.
In a statement, UCI said it was working on the terms of a restructuring with bondholders including funds managed by Blackrock, JP Morgan and Credit Suisse.
“Filing for Chapter 11 was a difficult decision but the right one to reposition the company,” said general counsel Keith Zar.
“Our business and our brands remain strong – we’re still investing capital, launching new products and offerings, hiring new talent to support our growth objectives and we have ample liquidity to operate our business.”
UCI supplies parts for the car industry including Airtex fuel systems, ASC water pumps and Luber-Finer filters.
It is ultimately owned by Mr Hart’s Rank Group, through New Zealand company UCI Holdings.
In February Standard & Poor’s said it regarded UCI’s position as highly leverage.
“For 2016, we expect UCI's total adjusted debt to EBITDA to be more than 10x and its free operation cash flow-to-total debt to be negative,” said the rating agency.
It described UCI’s business as vulnerable because of intense price pressure in the retail aftermarket and its limited diversity of revenue.
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Tim Hunter
Fri, 03 Jun 2016
Fri, 03 Jun 2016
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Graeme Hart's UCI files for bankruptcy over $US400m debt
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