Remy enters notes forbearance agreements, won't make April 15 interest payment on 9 3/8% notes

By Caroline Salls

Pittsburgh, April 16 - Remy International, Inc. entered into forbearance agreements with holders of almost 90% of its 9 3/8% senior subordinated notes due 2012, its 8 5/8% senior notes due Dec. 15, 2007 and its 11% senior subordinated notes due 2009, and the company will not make the April 15 interest payment on the 9 3/8% notes, according to a company news release.

Remy said it is in discussions with noteholders.

"We are very encouraged by the productive discussions we have had regarding a comprehensive recapitalization of our financial structure," president and chief executive officer John Weber said in the release.

The company said it did make the April 15 interest payment of $2.9 million on its second-priority senior secured floating-rate notes due in 2009.

Remy, with the support of its revolving credit facility lenders, continues to have access to its revolving credit facility, and, as of April 13, the company's liquidity position was roughly $73 million, consisting of $25 million in unrestricted cash and cash equivalents and $48 million of permitted availability under its revolving credit facility.

Additionally, Remy said $50 million of cash proceeds from the sale of assets of the diesel engine remanufacturing business remain in an escrow account for the benefit of the company's senior secured lenders.

Remy is an Anderson, Ind.-based manufacturer, remanufacturer and distributor of Delco Remy brand heavy-duty starters and alternators and Remy brand starters and alternators, locomotive products and hybrid power technology.

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