Fenwick Automotive Products limited bankruptcy filing expected
Motorcar Parts of America said it expects the company's separately capitalized subsidiaries, Fenwick Automotive Products Limited and Introcan (Fenco), will file for bankruptcy.
Fenco is currently being managed by a chief restructuring officer and a board not affiliated with Motorcar Parts of America, and Fenco will make any decision as to the timing and process for any bankruptcy proceeding.
"While Fenco had made progress in its transition plans for the undercar segment since the acquisition, the cost savings and operational efficiencies were not sufficient for Motorcar Parts to continue its involvement with Fenco under the current financial structure. Motorcar Parts of America has written off its investment in Fenco, which will be disclosed in the company's fiscal 2013 year-end results. The separation of the control of Fenco from us will result in the deconsolidation of Fenco from our financial statements," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts of America.
He emphasized that Motorcar Parts of America's rotating electrical base business continues to be strong. "We expect to report record sales of approximately $213 million for rotating electrical when the company files its fiscal 2013 year-end results this month," Joffe said. He noted that the company's liquidity remains strong. Motorcar Parts of America expects to report a cash position of approximately $19.0 million, and approximately $18.0 million available under the company's revolving credit facility at March 31, 2013. He added that the company will realize tax benefits as a result of the losses incurred through Fenco. These benefits will be realized in stages, based on the availability of refunds from past taxable periods and reductions in tax payments on future earnings.
Motorcar Parts of America is a remanufacturer of alternators and starters utilized in imported and domestic passenger vehicles, light trucks and heavy duty applications. Its products are sold to automotive retail outlets and the professional repair market throughout the United States and Canada, with remanufacturing facilities located in California, Mexico and Malaysia, and administrative offices located in California, Tennessee, Mexico, Singapore and Malaysia. Additional information is available at www.motorcarparts.com.
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