GST Receives Rescue Proposal From WL Ross Following Bankruptcy Filing
Global Safety Textiles Holdings LLC (GST) - a subsidiary of Greensboro, N.C.-based International
Textile Group Inc. (ITG) - and certain of its subsidiaries have filed for bankruptcy protection
under Chapter 11 of the US Bankruptcy Code. The company, which operates within ITG's Automotive
Safety business unit, manufactures airbag fabric and cushions for automotive applications; and has
operations in the United States, Germany and other European locations, Mexico and China.
Subsidiaries not included in the filing include GST locations outside the United States and the company's Greenville-based airbag operations. Greenville-based Safety Components International and Southampton, Pa.-based Narricot Industries LP's narrow technical fabrics facility, which supply certain automotive products and operate within the Automotive Safety business unit, are not GST subsidiaries and also are not included in the filing.
As of June 30, 2009, GST, which listed assets totaling between $100 million and $500 million, owed approximately $214 million including interest on a term and revolving loan that matured on that date. The company also listed outstanding obligations totaling nearly $1.5 million to its top 30 unsecured creditors.
New York City-based investment firm WL Ross & Co. LLC, majority owner of ITG, has submitted a proposal to invest $55 million in a new organization formed to acquire the assets of GST and its subsidiaries out of bankruptcy. The firm also has committed to provide a $25 million debtor-in-possession loan to help fund GST's operations prior to closing of the sale.
"We are excited to make a proposal that we believe would put GST on a stable footing and ensure that it can continue to support its key strategic customers in all the major car producing regions globally," said Wilbur L. Ross, chairman and CEO of WL Ross & Co., and chairman, ITG. "We expect that the proposed transaction with our sponsorship will be key to continuing relationships between GST and those customers."
"This new equity investment will enable GST to continue to support its strategic international customers who have benefited from GST's technological innovation and will continue to enjoy GST's commitment to price competitiveness and customer service," said Georg Saint-Denis, president, GST Europe and Asia. Stressing the need to close the transaction quickly to preserve GST's value, he added, "Our next step is to obtain our lenders' consent, and we plan to recommend that our lenders provide that consent as soon as possible."
July 14, 2009