If everything goes according to plan Grede Foundries will be under new ownership by the end of the calendar year. That should be good news for everyone, according to Grede Board Chairman Richard Koenings. Grede, which filed for Chapter 11 reorganization in June due to a stumbling economy and a hurting auto industry, has requested the federal bankruptcy court to approve a timeline for auction of the company by the middle of November. The timeline includes the auction’s end by early December and a closed deal by Dec. 31, 2009.
Although an affiliate of Wayzata Investment Partners LLC of Minn. has reached a purchase agreement with Grede already, their offer will only be the first of potentially many. Wayzata’s familiarity with Grede might give the company an advantage to purchase, but there are no guarantees. "Additional parties have expressed a strong interest in purchasing our company, and our request to the court is the next step in the process that we expect will lead to a sale of the company to the highest bidder before the year’s end," Koenings stated in a press release.
"The reorganization efforts we have undertaken in the last five months have strengthened our company and returned it to profitability, which has attracted the interest we have seen. The agreement with Wayzata and the setting of the auction schedule puts our organization in a strong position to emerge from bankruptcy by year end as we have targeted." Evan Zeppos, a Grede representative, said the difficult decisions Grede has made in the past year phasing out plants in Greenwood, S.C., and Vassar, Mich. are reasons the company has been seeing a turnaround. He added that those two plants will not be a part of the auction, but have already attracted attention from independent companies.
"We anticipate there will be several substantive offers for the company, and our goal will be to get the best value possible," Koenings said. "With the structuring changes we have made, and continuing indications that the economy may be rebounding, this is an excellent time to move this process forward." Zeppos said the best bid will be accepted; however, it’s not necessarily all about the money. "There’s no question dollars and cents are critical, but other items do factor in," he said in a phone interview Thursday, adding that some discussions have reached the point where future intentions are being examined.
Zeppos stressed that the sale of Grede is a positive step for the organization and all of its plants and employees. Koenings echoed these thoughts in the release. "This is a significant step forward, and we are pleased to have made this progress during the last several months," Koenings said. "We would not be in this positive position but for the exceptional effort of every employee at every one of our facilities, under extremely challenging circumstances. We remain deeply committed to doing everything necessary to put the company on solid footing."