Marelli in crisis uses Chapter 11 in the USA: KKR ready to give in to zero. The star of Stellantis (400 million)

Marelli, the largest manufacturer of car components in Italy, is in crisis, crushed by 4.9 billion debtfrom the difficulties of the European industry and from liquidity problems. The company based in Japan and 46 thousand employees therefore presented in the United States request for access to Chapter 11. It is a sort of arrangement that will allow Marelli to continue its productive activities and deliveries to customers while works on a renovation plan. Which is already on the table and accepted by 80% of creditors. « After almost a year of pull and spring, » said CEO of Marelli, David Slump, « the square was found when He was one step away from the court and « the car » was about to finish gasoline».

The renovation plan

The plan provides that Marelli receives a new 1.1 billion financing line that will allow the Italian-Japanese company to continue producing in the months during which the Chapter 11 procedure will take place. To the outcome at which, the $ 4.9 billion in Marelli debts will be zeroed and the creditors will become owners of the group instead of the American KKR fund which in 2019 spent 6.2 billion to buy Marelli from Fiat-Chrysler And then merge it with the Japanese Calso Kansei creating a group of over 10 billion of revenues.

The crisis of the European car

However, the project of the American fund did not go according to the forecasts due to the succession of difficulty: the pandemic, the shortage of chips, the boom in energy costs, the braking of the transition to electric and, finally, the duties of Donald Trump. One crisis after another that led Marelli to cut 18,600 employees in the years and repeatedly reorganized its debt exposure.

The transfer of ownership

Currently, as filtered, among the Marelli creditors have a predominant role of the Japanese bank Mizuho and the Opportunist Fund Strategic Value Partners. The bulk of the new financing line, says Bloomberg, would instead be assured by Deutsche Bank. The SVP Fund could therefore become the next reference member of Marelli, unless in the next 45 days, does not arrive for the company a better offer than the renovation plan just described. The Indian Motherson group is the main suspect, if only because recently has already been forward several times with Kkr without, however, succeeding – so far – to find an agreement with the Marelli creditors.

The alarm of the unions

The uncertainty situation aroused alarm in Italy, where Marelli takes about 6000 people distributed over ten systems. « After a phase of apparent recovery, the company falls into a condition of conclatoed crisis », wrote the unions, asking for government intervention to « avoid yet another catastrophe in the country ». THEThe government « is attentive and vigilant, » said the Minister of Business Adolfo Ursoconvening for June 19 a meeting in which the group’s leaders will participate, the workers’ organizations and the regional institutions involved.

The car houses on display

In presenting an application pursuant to Chapter 11, Marelli has assured that the renovation plan is functional precisely to the continuation of the production activities. The plan, Slump underlined, « guarantees that our customers and partners all over the world can continue to count on Marelli for punctual delivery»Of the components and technologies provided by Marelli. A reassurance addressed not only to employees but also to the many manufacturers who paid advances on the orders in Marelli (also to support it in the most difficult phases) and are now exposed to the company’s crisis. These include Stellantis (454 million dollars), Nissan (313 million), Bosch (45 million) and Tesla (26 million).