Dura Automotive Systems Inc.’s U.S. and Canadian operations, which account for nearly half of the parts maker’s revenues, file for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Delaware.
With the Oct. 30 filing, the Rochester Hills, MI-based company joins a slew of suppliers, includingCorp., Corp. and Collins & Aikman Corp., that have filed for Chapter 11 due to rising raw material costs and production cuts by Detroit-based auto makers.
Dura produces brakes, pedals, gearshifts and various other components, withMotor Co. its largest customer.
“With industry conditions tightening further, we concluded that our capital structure is no longer appropriate,” Dura Chairman and CEO Larry Denton says.
“Pursuing a financial reorganization under court protection is the prudent course of action and positions us for long-term sustainability,” he says.
The company gives no timetable for emerging from bankruptcy but says it has secured about $300 million in debtor-in-possession financing from Goldman Sachs Group Inc., GE Capital Corp. and Barclays Bank plc.
The new financing will improve liquidity, Dura says, adding it will be used to fund normal operations and continue the operational restructuring program the company initiated in February.
Dura had been expected to file for bankruptcy ever since it missed a bond interest payment in mid-October.
The company has retained restructuring specialists Miller Buckfire & Co. as financial adviser and Kirkland & Ellis LLP as legal adviser.