The company was last in this position between November 2001 to June 2003 when it formulated a strategy of focusing on core business, namely steel and aluminum car wheels and truck steels wheels.
Now having sold virtually all the areas that don’t fit into these categories, Hayes Lemmerz has collapsed under the heavy burden of debts. The news follows an earlier announcement that Hayes had received a written warning that it faces listing compliance issues for filling full-year 2008 results too late.
In a statement Hayes Lemmerz International, Inc. said the majority of lenders holding the company’s secured debt have reached an agreement regarding restructuring. Some will provide a debtor-in-possession loan to the company, which will make available up to $100 million of additional liquidity, to enable it to continue operating during the restructuring period.
The company’s official statement on the matter explained that Hayes Lemmerz International, Inc. and “certain of its U.S. subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the District of Delaware." Hayes Lemmerz Finance LLC – Luxembourg S.C.A., was also included in the filing.
"The Chapter 11 filings were precipitated by an unprecedented slowdown in industry demand and a tightening of credit markets," said Curtis Clawson, chairman and CEO, adding: "These filings will allow us to reduce our debt and restructure our balance sheet. We fully expect to emerge from Chapter 11 as a stronger, more competitive company than we are today." As the filings were "pre-negotiated" restructuring plan with the support of a majority its secured lenders, the company expects to complete its restructuring process on an accelerated basis. (Tyres & Accessories/Staffordshire, U.K.)
