(Reuters) – FormTech Industries LLC, a supplier of forged metal automotive components, filed for bankruptcy protection and said it would sell its assets to a newly formed unit of HHI Holdings LLC, a portfolio company of U.S. private equity group KPS Capital Partners.
FormTech filed a motion with the bankruptcy court, seeking approval to sell its assets through a court-supervised auction. The sale process will also allow it to seek higher and better offers.
“An affiliate of HHI has agreed to provide FormTech with a debtor-in-possession (DIP) financing facility to support going concern operations,” the company said in a statement.
Companies rely on DIP financing to fund operations while in bankruptcy.
The proposed deal is expected to close within 45 days subject to bankruptcy court approval, the company said.
FormTech, which employs about 400 people in Michigan and Ohio, added that it appointed Jeffrey Zappone of CM&D Management Services LLC as chief restructuring officer.
In its Chapter 11 filing, the Royal Oak, Michigan-based company listed assets in the range of $100 million to $500 million and debt in the range of $50 million to $100 million.
The case is In re: FormTech Industries LLC, U.S. Bankruptcy Court, District of Delaware (Delaware), No: 09-12964.
By Santosh Nadgir
(Editing by Gopakumar Warrier, Vinu Pilakkott)