CHICAGO, IL, June 14, 2012 /CNW/ - June 14, 2012, Northstar Aerospace,
Inc. (the "Corporation", together with its affiliates "Northstar")
announced today that, after full consideration of all its available
alternatives, its U.S. subsidiaries, Northstar Aerospace (USA) Inc.,
Northstar Aerospace (Chicago) Inc., Derlan USA Inc. and D-Velco
Manufacturing of Arizona, Inc. have filed Chapter 11 petitions in the
United States Bankruptcy Court for the District of Delaware. The
Corporation, Northstar Aerospace (Canada) Inc. and certain of its
Canadian subsidiaries are applying today for an Initial Order from the
Ontario Superior Court of Justice (Commercial Division) under the Companies' Creditors Arrangement Act ("CCAA"). The main purpose of the filings is to effectuate a going
concern sale of the business as discussed below.
The Corporation will be requesting CCAA protection for an initial period
of 30 days, expiring on July 14, 2012. While under CCAA and Chapter 11
protection, creditors and others are stayed from pursuing any claims or
enforcing any rights against the filing entities.
The Corporation's Board of Directors have elected to resign their
positions concurrently with the CCAA filing. The Corporation is
seeking the appointment of FTI Consulting Canada, Inc., as Chief
Restructuring Officer under the Initial Order. The Corporation also is
proposing that Ernst & Young Inc. be appointed as monitor in the CCAA
proceeding (the "Monitor").
It is intended that Northstar's operations will continue uninterrupted
during the CCAA and Chapter 11 proceedings and obligations to employees
and suppliers of goods and services provided after the filing date will
continue to be met.
Northstar's existing secured lenders have agreed to provide additional
debtor-in-possession ("DIP") financing of up to U.S. $4 million during
the CCAA and Chapter 11 proceedings, subject to customary terms and
conditions. Northstar has also obtained additional DIP financing of up
to U.S. $7 million, subject to customary terms and conditions from
Boeing Capital Loan Corporation.
The Corporation has entered into an asset purchase agreement, subject to
approval of the Courts (the "APA") with Heligear Acquisition Co. and
Heligear Canada Acquistion Corporation, affiliates of Wynnchurch
Capital, Ltd., pursuant to which substantially all of the assets of
Northstar will be sold for an aggregate purchase price of approximately
U.S. $70 million, together with the assumption of certain liabilities.
This "stalking horse bid" will be subject to a competitive bidding
procedure, whereby, higher and better offers may be obtained. The
bidding procedure and timelines are subject to approval of the Courts,
but it is currently anticipated that the deadline for superior bids
will be on or around July 14, 2012. If no superior offers are
received, there would be insufficient proceeds to repay Northstar's
secured creditors and consequently no proceeds to pay any of the
Corporation's unsecured creditors or shareholders.
All inquiries regarding the CCAA proceeding should be directed to the
Monitor (hotline is 855-769-3922 or local 416-943-3889). Information
about the Corporation's CCAA proceeding, including copies of the APA,
all Court Orders and the Monitor's reports, will be available on the
Monitor's website at www.ey.com/ca/northstaraerospace. All inquiries regarding the Chapter 11 proceeding should be directed
to FTI Consulting at telephone 708-728-2073 or inquiries@nsaero.com. Information about the Corporation's Chapter 11 proceeding, including
copies of the APA and all Court Orders, will be available at www.loganandco.com.
Harris Williams & Co. acted as financial advisor to Northstar in
connection with the selection of the stalking horse bidder and is being
proposed to continue to serve as financial advisor through the CCAA and
Chapter 11 proceedings.
About Northstar Aerospace, Inc.:
Northstar Aerospace, Inc. (www.nsaero.com) is North America's leading independent manufacturer of flight critical
gears and transmissions. Northstar Aerospace, Inc. is a public company
with operating subsidiaries in the United States and Canada. Its
principal products include helicopter gears and transmissions,
accessory gearbox assemblies, rotorcraft drive systems and other
machined and fabricated parts. It also provides maintenance, repair
and overhaul of components and transmissions. The Company's executive
offices are located in Chicago, Illinois. Its plants are located in
Chicago, Illinois; Phoenix, Arizona and Milton and Windsor, Ontario.
About Wynnchurch Capital, Ltd.:
Wynnchurch Capital, Ltd., headquartered in the Chicago suburb of
Rosemont, Illinois with offices in Dallas, Detroit, and Toronto and an
affiliate office in Montreal, was founded in 1999 and is a leading
middle-market private equity investment firm. Wynnchurch's strategy is
to partner with middle market companies in the United States and Canada
which have outstanding management teams and possess the potential for
substantial growth and profit improvement. Wynnchurch Capital manages a
number of private equity funds with capital under management in excess
of $1 billion specializing in management buyouts, recapitalizations,
corporate carve-outs, restructurings and growth capital. More
information about Wynnchurch Capital can be found at: www.wynnchurch.com.
Forward Looking Statements
This press release contains forward-looking statements that are subject
to risks and uncertainties. All statements, other than statements of
historical fact included in this press release, including the
statements in the press release relating to the Corporation's CCAA
proceeding, the sales process and obtaining additional financing may be
or include forward-looking statements. Forward-looking information
contained herein is based upon a number of assumptions and actual
future events may differ materially depending on a variety of factors,
including the Corporation's ability to access sufficient financing and
the conditions associated with the sale of the Corporation's assets.
Other important factors that could cause actual results to differ
materially from the Corporation's expectations (together with the
cautionary statements in the previous sentence, "Cautionary
Statements") are included in the Corporation's Consolidated Financial
Statements for the Years Ended December 31, 2010 and 2009 -
Management's Discussion and Analysis - Risks and Uncertainties, the
Corporation's Annual Information Form filed on March 25, 2011, under
the heading of Risks and Uncertainties, the Corporation's Consolidated
Interim Financial Statements for the three and nine months ended
September 30, 2011, and 2010 under the heading Basis Of Preparation And
Adoption Of IFRS - Going Concern and in the related Management's
Discussion and Analysis under the heading Risks and Uncertainties and
the heading Going Concern. Although the Corporation believes that the
expectations reflected in such forward-looking statements are
reasonable, there can be no assurance that such expectations will prove
to have been correct. All information contained in this press release
and subsequent written and oral forward-looking statements attributable
to the Corporation or persons acting on behalf of the Corporation are
expressly qualified in their entirety by the Cautionary Statements. The
Corporation disclaims any intentions or obligation to update or revise
any forward looking statements or comments as a result of any new
information, future event or otherwise, unless such disclosure is
required by law.
