Motorcar Parts of America expects subsidiaries to file for bankruptcy

By Caroline Salls

Pittsburgh, June 10 - Motorcar Parts of America, Inc. expects separately capitalized subsidiaries Fenwick Automotive Products Ltd. and Introcan (collectively, Fenco) to file for bankruptcy, according to a Motorcar news release.

Motorcar said Fenco is currently being managed by a chief restructuring officer and a board not affiliated with Motorcar Parts of America, and Fenco will make any decision as to the timing and process for any bankruptcy proceeding.

"While Fenco had made progress in its transition plans for the undercar segment since the acquisition, the cost savings and operational efficiencies were not sufficient for Motorcar Parts to continue its involvement with Fenco under the current financial structure," Motorcar chairman, president and chief executive officer Selwyn Joffe said in the release.

"Motorcar Parts of America has written off its investment in Fenco, which will be disclosed in the company's fiscal 2013 year-end results. The separation of the control of Fenco from us will result in the deconsolidation of Fenco from our financial statements."

Joffe said Motorcar's rotating electrical base business continues to be strong, and the company's liquidity remains strong.

Motorcar will realize tax benefits as a result of the losses incurred through Fenco, the release said. These benefits will be realized in stages, based on the availability of refunds from past taxable periods and reductions in tax payments on future earnings.

Los Angeles-based Motorcar provides remanufactured alternators and starters for the automotive aftermarket.

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