UCI Holdings files for Chapter 11 to restructure debt

By Caroline Salls

New York, June 2 – UCI Holdings Ltd. and subsidiary UCI International, LLC filed for Chapter 11 Thursday in the U.S. Bankruptcy Court for the District of Delaware, the company announced in a news release.

The company said that it aims to restructure its debt in order to deleverage the company and better position it for future growth.

Included in the filing are all the domestic operating companies, among them Airtex Products, LP, ASC Industries, Inc. and Champion Laboratories, Inc. Excluded are UCI’s international operations and its affiliates Autoparts Holdings and FRAM Group Holdings.

UCI said it is working on a consensual restructuring with its lead bondholders, including funds managed by BlackRock, JPMorgan and Credit Suisse Asset Management.

“Our business and our brands remain strong – we’re still investing capital, launching new products and offerings, hiring new talent to support our growth objectives and we have ample liquidity to operate our business,” UCI general counsel Keith Zar said in the release.

“The company continues to operate all of its manufacturing operations.”

In connection with the Chapter 11 filing, UCI requested court approval to use the cash collateral of its pre-bankruptcy ABL secured parties to fund its operations while in bankruptcy.

Debt details

According to court documents, UCI has $100 million to $500 million in assets and $500 million to $1 billion of debt. The UCI debtors had $435.3 million in total assets and $716.8 million in total debt on a consolidated basis for the year ended Dec. 31.

The company’s largest unsecured creditors are:

• Indenture trustee Wilmington Trust, NA of Wilmington, Del., with a $400 million 8 5/8% senior notes claim;

• Randall Metals Corp. of Elk Grove Village, Ill., with a $6.48 million trade debt claim;

• Ahlstrom Engine Filtration LLC of Greenville, S.C., with a $3.67 million trade debt claim;

• Jasper Rubber Products Inc. of Jasper, Ind., with a $3.22 million trade debt claim;

• Worthington Steel Co. of Columbus, Ohio, with a $2.81 million trade debt claim;

• Blue Cross Blue Shield of Illinois, based in Chicago, with a $2.55 million trade debt claim;

• A L Solutions US Inc. of Ramsey, N.J., with a $1.79 million trade debt claim;

• NSK Corp. of Ann Arbor, Mich., with a $1.47 million trade debt claim;

• Boutwell Owens & Co. Inc. of Fitchburg, Mass., with a $1.46 million trade debt claim; and

• Standard Group LLC of Jackson Heights, N.Y., with a $1.26 million trade debt claim.

Payment issues

The company previously announced on March 18 that it had entered into a forbearance agreement with holders of more than 80% of its 8 5/8% senior notes.

An interest payment due on Feb. 16 was skipped, triggering a 30-day grace period.

During the forbearance period, noteholders agreed to refrain from taking any actions against the company for failure to pay interest.

The company is represented by Young, Conaway, Stargatt & Taylor.

UCI is an Evansville, Ind.-based supplier to the light- and heavy-duty vehicle aftermarket for replacement parts, including filtration, fuel delivery systems, vehicle electronics and cooling systems products. The Chapter 11 case number is 16-11354.

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