- UCI units make filters, pumps for GM, Ford and retail chains
- Graeme Richard Hart’s Rank Group took over company in 2011
UCI International LLC, the U.S. auto-parts maker owned by New Zealand billionaire Graeme Richard Hart, filed for bankruptcy after losing business from three of its biggest customers.
Units of UCI make pumps and filters for carmakers including Ford Motor Co. and General Motors Co., and until last year had sold many aftermarket parts through retailers AutoZone Inc. and Advance Auto Parts Inc. The company also has private-label deals to make products for brands including Napa, STP and Motorcraft.
Lake Forest, Illinois-based UCI has 1,800 employees in the U.S. Its assets total about $435 million and liabilities run to about $717 million, including $400 million in unsecured bonds, according to filings in Delaware bankruptcy court.
Brian Whittman of turnaround adviser Alvarez & Marsal, who was brought in to act as UCI’s chief restructuring officer, called the balance sheet “unsustainable.”
GM, AutoZone and Advance had represented the UCI companies’ biggest revenue sources, he said. But the retailers last year switched suppliers, with Advance turning to a manufacturer in China. On top of that, UCI’s ASC unit lost a bid to provide water pumps for GM’s “Gen V+” vehicles.
Not all of the UCI products Advance replaced are made in China, Anna Gurney, an Advance spokeswoman, said in an e-mailed statement. Advance oil filters are made in North Carolina, while fuel pumps come from China and Canada, she said.
Whittman and a lawyer for UCI, Larry J. Nyhan, didn’t immediately respond to calls seeking comment on the filing.
To weather the setbacks, UCI reorganized operations, Whittman said. In February, he said, the company also appointed an independent director to help negotiate with creditors and other stakeholders, to no avail.
“In late May, it became clear to the debtors that their key constituencies would be unable to reach agreement on the terms of a consensual, out-of-court restructuring,” Whittman said. The company has received a new offer from a group of noteholders and will continue negotiating while in bankruptcy, he said.
Hart became the indirect owner of UCI after a 2011 acquisition by his firm, Auckland-based Rank Group Ltd. He’s listed at 180 on the Bloomberg Billionaires Index, with a net worth of $6.9 billion, making him the wealthiest person in New Zealand.
UCI’s 8.625 percent bond due in 2019 traded at 24.75 cents on the dollar at 4:25 p.m. in New York Thursday, down from its last big trade of 28.75 cents on May 4, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.
The case is In re UCI International LLC, 16-11354, U.S. Bankruptcy Court, District of Delaware (Wilmington).