INTERMET Files Plan of Reorganization
June 24 2005 - 7:18PM
PR Newswire (US)
INTERMET Files Plan of Reorganization Important step toward
emergence from Chapter 11 TROY, Mich., June 24
/PRNewswire-FirstCall/ -- INTERMET Corporation (INMTQ:PK), a
diversified manufacturer of cast-metal components, today announced
that it has entered into a commitment letter with R2 Investments,
LDC and Stanfield Capital Partners, LLC to underwrite an equity
investment into INTERMET in the amount of $75 million, subject to
certain terms and conditions, and that it has filed a proposed Plan
of Reorganization with the United States Bankruptcy Court in the
Eastern District of Michigan. The commitment letter and court
filing represent important steps for the company in its efforts to
strengthen its balance sheet, complete its restructuring and emerge
from Chapter 11. On September 29, 2004, INTERMET and 17 of its
domestic subsidiaries filed petitions for relief under Chapter 11
of the United States Bankruptcy Code. Commenting on today's
announcement, INTERMET Chairman and CEO Gary Ruff said, "The
commitment letter and the filing of our reorganization plan are
major steps for us and represent the start of the final phase of
INTERMET's operational and financial restructuring. Over the last
eight months, we believe much has been accomplished in terms of
putting the company back on track in its strategy for long-term
growth. We are especially pleased that we also have continued to
receive new and replacement business awards in our ferrous,
light-metals and European groups during this challenging time." The
proposed Plan of Reorganization provides for full payment of
administrative claims, tax claims, claims pursuant to INTERMET's
debtor-in- possession credit agreement, U.S. Trustee fees,
consignment claims and claims of certain secured pre-petition
creditors. Payment for these claims will be funded by an exit
credit facility that INTERMET is currently negotiating and a new
$75 million equity investment pursuant to the Plan of
Reorganization. Under the Plan of Reorganization, unsecured
creditors may either elect to receive shares of stock in the
reorganized INTERMET in exchange for their claims or they may elect
to receive cash. Reorganized INTERMET will provide 2.5 million
shares of common stock to unsecured creditors in exchange for their
claims. Unsecured creditors who elect to receive shares of stock in
the reorganized INTERMET will also receive the opportunity to
purchase up to 7.5 million additional shares of stock through the
private rights offering at a price of $10 per share. To the extent
that the full $75 million is not subscribed for pursuant to the
private rights offering, R2 and Stanfield have agreed pursuant to
the commitment letter to purchase the shares of stock not otherwise
purchased in the private rights offering. Under the proposed Plan
of Reorganization, all pre-petition equity interests of INTERMET
Corporation will be canceled. Confirmation of the proposed Plan of
Reorganization remains subject to various requirements and the
approval of the Bankruptcy Court. About INTERMET: With headquarters
in Troy, Michigan, INTERMET Corporation is a manufacturer of
cast-metal components for the automotive, commercial- vehicle and
industrial industries. The company has approximately 5,300
employees worldwide. More information is available on the Internet
at http://www.intermet.com/ . Specific information relating to the
Chapter 11 cases filed by INTERMET and certain of its domestic
subsidiaries, including a copy of the proposed Plan of
Reorganization, can be found on the Internet at
http://www.administar.net/intermet . Cautionary Statement: This
news release includes forward-looking statements within the meaning
of the Private Securities Litigation Reform Act of 1995. The word
"believe" and similar words and expressions identify
forward-looking statements. These statements are not guarantees of
future performance but instead involve various risks and
uncertainties. INTERMET's actual results may differ materially from
those suggested by its forward- looking statements due to factors
such as: the economic cost, management distraction and lost
business opportunities associated with bankruptcy proceedings;
INTERMET's continued access to its DIP financing; the high cost of
scrap steel and the possibility that scrap steel costs will remain
at high levels or continue to increase, which would have further
negative effects on INTERMET's profitability, cash flow, liquidity
and ability to borrow; fluctuations in the cost of other raw
materials, including the cost of energy, aluminum, zinc, magnesium
and alloys, and INTERMET's ability, if any, to pass those costs on
to its customers; pricing practices of INTERMET's customers,
including changes in their payment terms resulting from the
discontinuation of early payment programs and continuing demands
for price concessions as a condition to retaining current business
or obtaining new business, and the negative effect that price
concessions have on profit margins; changes in procurement
practices and policies of INTERMET's customers for automotive
components, including the risk of the loss of major customers or
the loss of current or prospective vehicle programs as a result of
INTERMET's financial condition and prospects (or otherwise);
possible inability to close unprofitable plants or to transfer work
from one plant to another because of the related costs or customer
requirements; general economic conditions, including any downturn
in the markets in which INTERMET operates; fluctuations in
automobile and light and heavy truck production, which directly
affect demand for INTERMET's products; deterioration in the market
share of any of INTERMET's major customers; fluctuations in foreign
currency exchange rates; work stoppages or other labor disputes
that could disrupt production at INTERMET's facilities or those of
its customers; continuing changes in environmental regulations to
which INTERMET is subject, and the costs INTERMET will incur in
meeting more stringent regulations; factors or presently unknown
circumstances that may result in impairment of INTERMET's assets,
including further write-downs of its goodwill; and other risks as
detailed from time to time in INTERMET's periodic SEC reports.
DATASOURCE: INTERMET Corporation CONTACT: Mike Kelly of INTERMET
Corporation, +1-248-952-2500 Web site: http://www.intermet.com/
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