Accuride Corp. has an agreement with lenders to restructure its North American operations under creditor protection through the U.S. Bankruptcy Code (Chapter 11) and the comparable process under Canada’s Companies’ Creditors Arrangement Act. Robin Kendrick, president and CEO of the manufacturer of steel and aluminum commercial vehicle wheels and wheel-end components and assemblies claimed the procedure will “create a healthier capital structure that will allow the company to remain a leader in the global wheel market.”
The company’s numerous overseas holdings are not covered by the reorganization plan.
Accuride is owned by private-equity group Crestview Partners. According to its U.S. Bankruptcy Court petition, the business has debts totaling $500 million to $1 billion (with more than $73 million due to mature in October 2024) and it has only about $6 million in cash available.
“I am confident this reorganization will give Accuride the financial flexibility it needs to grow its business and support its employees, customers, and suppliers,” according to Kendrick’s statement.
According to the company’s chief restructuring officer, Charles Moore, “supply-chain distortions and a steep rise in the cost of several key inputs” are the primary cause of the financial dilemma. Other reports identify recessionary conditions for Accuride falling behind its payments to suppliers, which has enhanced the need to restructure its debts.
Accuride made it clear in its announcement that all its plants will continue to operate as usual – though one company official indicated that an effort is underway to sell the Gunite ferrous foundry operation in Rockford, IL.
The plant is among the country’s oldest operating foundries, casting brake drums for commercial and off-road vehicles.
“Accuride is in an active sale process to determine if there is a buyer for our wheel-end business. If a sale cannot be consummated, we will begin to wind down the wheel end business,” according to a statement by marketing director Grant Hatton. “We are working with our customers to understand their requirements, which will determine the timeframe for a potential winddown, if a sale cannot be completed.”