Intermet gets court OK for disclosure statement, $75 million plan funding equity commitment

By Caroline Salls

Pittsburgh, Aug. 12 - Intermet Corp.'s disclosure statement for its plan of reorganization and its request to enter into a $75 million equity financing commitment letter were approved by the U.S. Bankruptcy Court for the Eastern District of Michigan, according to a Friday filing with the Securities and Exchange Commission.

A hearing for confirmation of the company's plan is scheduled for Sept. 26.

The request for the commitment letter from R2 Investments, LDC and Stanfield Capital Partners LLC was filed with Intermet's plan of reorganization on June 24.

The court previously denied approval of the commitment letter, but allowed the company to resubmit the request.

As previously reported, under the proposed plan, unsecured creditors, including holders of the 9¾% senior notes due 2009, will be able to receive new shares or cash.

The company will set aside 2.5 million shares to allocate to unsecured creditors and those who pick this option can also participate in a rights offer of up to 7.5 million further shares at $10.00 per share.

The plan proposes that R2 and Stanfield will backstop the rights offering.

Under the cash option, payments will be at $10.00 per allocated share.

Between them, R2 and Stanfield own $58 million of the 9¾% notes.

Holders of Intermet's pre-bankruptcy equity will receive nothing.

Intermet will pay in full administrative claims, tax claims, claims on the debtor-in-possession credit facility, U.S. Trustee fees, consignment claims and claims of some secured pre-petition creditors.

Funding for these payments will come from a $75 million exit facility currently being negotiated and the proposed equity investment.

Intermet, a Troy, Mich.-based auto parts maker, filed for bankruptcy on Sept. 29, 2004. Its Chapter 11 case number is 04-67597.

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