Shiloh Industries Inc. filed for bankruptcy with a plan to sell its assets to private-equity firm MiddleGround Capital LLC for $218 million, subject to better offers at auction.
Valley City, Ohio-based Shiloh filed for bankruptcy on Sunday in the U.S. Bankruptcy Court in Wilmington, Del., with a stalking-horse bid from MiddleGround.
Shiloh’s lenders are providing a loan of more than $123 million to finance the stay in bankruptcy and to pay down some of its outstanding debt.
The company makes components for vehicles specializing in parts and materials that reduce weight and noise. Its customers include Bayerische Motoren Werke AG, Daimler AG, Ford Motor Co. and General Motors Co.
Shiloh and its customers were already facing headwinds before the coronavirus pandemic hit. In the year ended in October 2019, the company’s production in Asia, Europe and North America fell by 12.2%, 4.3% and 3.4%, respectively, according to a declaration filed with the court by Jeffrey Ficks of Ernst & Young LLP, who is serving as the company’s financial adviser.
The company also acquired some aluminum-casting facilities in March 2018 for more than $65 million. One of those plants — Brabant Alucast Italy Site Verres — is now in bankruptcy in Italy after racking up losses in recent quarters, according to Mr. Ficks.
In the past year, Shiloh recorded more than $13 million in losses — measured in terms of earnings before interest, taxes, depreciation and amortization — at two plants in Pierceton, Ind., and Clarksville, Tenn.
With consumer demand plummeting because of the Covid-19 pandemic, the company was forced to temporarily close some manufacturing and assembly plants around the world, according to Mr. Ficks. Shiloh said its net revenue fell 25% to $401 million in the six months ended April 30 from $532 million in the comparable period last year.
Once the company decided to restructure and sell all of its assets, it hired Houlihan Lokey Capital Inc. as its investment banker.
Judge Laurie Selber Silverstein is overseeing the chapter 11 case, number 20-12024.
Write to Soma Biswas at soma.biswas@wsj.com
Source : MTV
