Electrical Components Wins Approval of Recovery Plan, to Exit Within Days
Electrical Components International Inc., a maker of wire harnesses for appliances, won court approval of its restructuring plan, paving the way for the company to exit bankruptcy after less than two months.
U.S. Bankruptcy Judge Kevin J. Carey gave Electrical Components approval of its pre-packaged reorganization plan, which swaps debt for new equity, at a hearing today in Wilmington, Delaware.
The plan will reduce the company’s debt by about half, according to court documents. Electrical Components expects to leave bankruptcy protection within a few days, said Stephen A. Youngman, a lawyer for the company.
Under the plan, lenders with the highest level of repayment, owed a principal amount of about $261.4 million, will get 54.7 percent of the new common stock and a $145 million term loan, court papers show. Some of the lenders elected to receive $10.4 million in cash rather than stock.
Investors, including BlackRock Kelso Capital Corp. and Sankaty Advisors, will buy the remaining 45.3 percent of the new stock for about $32.9 million, according to court papers.
Lenders with a secondary priority of repayment, owed a principal of about $60 million, will share $10 million, court papers show. Unsecured creditors won’t be affected by the restructuring.
The St. Louis-based company listed assets of about $363.6 million and debt of about $435.7 million in Chapter 11 documents filed March 30. The company is owned by San Francisco-based private-equity firm Francisco Partners LP.
Electrical Components makes wire harnesses, bundles of wires or cables fitted with connectors or plugs that deliver electricity throughout appliances, according to court documents.
The company said it is the largest supplier of wire harnesses to the North American white-goods market, a term used for large appliances such as refrigerators and washing machines. The company’s products also are used in automobiles and construction and agriculture equipment, according to its Web site.
Electrical Components generated about $460 million in sales for the year ended Dec. 31, court papers show. The company supplies companies such as General Motors Co., Chrysler Group LLC, General Electric Co., and the world’s largest appliance maker, Whirlpool Corp.
The case is In re Electrical Components International Inc., 10-11054, U.S. Bankruptcy Court, District of Delaware (Wilmington).