NEW YORK (Reuters) – Motor home maker Fleetwood Enterprises Inc (FLTW.OB) has filed for bankruptcy and will close its travel trailer division, the company said on Tuesday.
Fleetwood, which also makes manufactured housing and military barracks, has been hurt by high fuel prices and the housing market decline. It is seeking a buyer for its motor home and manufactured housing units.
International operations are not included in the bankruptcy filing.
As of Oct. 26, the latest data available, Fleetwood had assets of $558.3 million and liabilities of $518 million.
The Riverside, California, company has been trying to restructure for three years. It said a bankruptcy filing would allow it to get out from under a December debt exchange that pledged company property as collateral, and help lift some of the liability related to shuttering its travel trailer unit.
“We will use the Chapter 11 process to more rapidly restructure our overhead, pursue potential buyers, and definitively resolve our debt issues,” President and Chief Executive Officer Elden Smith said in a statement.
As of Jan. 25, Fleetwood had cash of about $23 million, excluding cash remaining in non-filing entities.
Fleetwood’s travel trailer division had losses of $65.3 million in 2007 and $16.8 million in 2008. The shutdown of the business affects three manufacturing facilities and two service facilities employing about 675 people. The company is also laying off an additional 65 corporate associates.
As of March 6, the company employed about 3,700 people, according to court documents.
Fleetwood, which began in 1950 as a maker of manufactured housing, said it believes it has sufficient cash to operate in the immediate term. It is in “advanced discussions” with its senior secured lenders for new debtor-in-possession financing to supplement existing working capital.
In 2007, Fleetwood was the second-largest U.S. maker of manufactured homes, in terms of retail units shipped.
The housing market slump and the weakening economy have also pushed related companies into bankruptcy. Coburg, Oregon-based Monaco Coach Corp (MCOAQ.PK), a maker of motorized and towable recreational vehicles, filed for Chapter 11 bankruptcy on March 5. RV maker Country Coach LLC has also filed for bankruptcy.
The Fleetwood case is In re Fleetwood Enterprises, Inc, US Bankruptcy Court, Central District of California (Riverside), No. 09-14254.
(Reporting by Chelsea Emery; editing by John Wallace)
peHUB note: Tennenbaum Capital Partners and Marathon Asset Management are significant shareholders.