PARIS, Sept 25 (Reuters) - French car parts supplier Valeo on Wednesday announced it would inject $226 million into a rescue plan to recapitalise its insolvent U.S. subsidiary.
Valeo said in a statement that Valeo Electrical Systems Inc. (VESI) was cleared to emerge from the protection of Chapter 11 of the U.S. bankruptcy code after the U.S. bankruptcy court approved the refunding plan.
The plan should take effect from October 7, with payments to creditors holding "allowed claims" due to start shortly afterwards, Valeo said, adding that the plan should ensure a solid framework for the unit's future.
Valeo was able to start putting together a rescue plan for its insolvent U.S. unit in May after unions finally gave the green light to a broad restructuring.