Marelli Holdings Receives Support from SVP-led Consortium to Exit Bankruptcy

On July 29, Japanese automotive parts supplier Marelli Holdings announced that a consortium led by the American investment firm Strategic Value Partners (SVP) will support the company's turnaround efforts, with the goal of exiting bankruptcy protection next year. This consortium, composed of five lending institutions, is also a creditor of Marelli and includes Deutsche Bank and the Asian private equity firm MBK Partners. Following the 45-day 'bidding period' for receiving more competitive acquisition proposals, which ended on July 29, the consortium was officially confirmed as Marelli's restructuring investor under Chapter 11 of the U.S. Bankruptcy Code. Additionally, the U.S. Federal Bankruptcy Court in Delaware has approved Marelli for $130 million in debtor-in-possession (DIP) financing, which adds to the previously secured $519 million and will be used to pay business partners and other expenses. Marelli's President and CEO David Slump stated in a release on July 29 that the company is 'collaborating with future stakeholders to advance the restructuring process.' He added that Marelli looks forward to working with the consortium to 'ensure a seamless transition of ownership upon exiting bankruptcy protection.' On June 11 of this year, Marelli voluntarily filed for Chapter 11 bankruptcy protection in the U.S. District Court in Delaware to comprehensively restructure its long-term debt. Approximately 80% of creditors have signed agreements in support of the restructuring, which will effectively reduce Marelli's debt-to-equity ratio and significantly improve its liquidity position. Marelli has stated that the bankruptcy protection process is not expected to impact its daily operations, and the company will continue to work closely with customers, suppliers, and partners while investing in innovative resources to develop advanced technology portfolios. Marelli was formed by the merger of Calsonic Kansei, a major supplier to Nissan, and the Italian large automotive parts manufacturer Magneti Marelli. It is reported that Nissan's operational difficulties in recent years have significantly contributed to Marelli's financial challenges.