Dana Holding Corporation (ticker: DAN, exchange: New York Stock Exchange (.N))
News Release -
Dana Enters Into Amendment to Investment Agreement With Centerbridge Capital Partners, Rejects Alternative Proposal From Appaloosa Management
TOLEDO, Ohio, Oct. 12 /PRNewswire-FirstCall/ -- Dana Corporation
(OTC Bulletin Board: DCNAQ) today announced that it has entered into an
amendment to the investment agreement it reached with Centerbridge Capital
Partners, L.P., on July 26, 2007. Dana also announced that its Board of
Directors has rejected an alternative investment offer submitted by Appaloosa
Amendment to the Centerbridge Agreement
The original terms of the Centerbridge investment agreement provided,
among other things, for an affiliate of Centerbridge to purchase $250 million
in convertible preferred shares of reorganized Dana (Series A), and for
qualified supporting creditors to have an opportunity to purchase $500 million
in convertible preferred shares (Series B) on a pro rata basis. Centerbridge
had agreed to purchase up to $250 million of any Series B shares that were not
purchased by the creditors.
Among the amendments to the Centerbridge agreement are:
-- A commitment by Centerbridge to fully underwrite the purchase of the
$500 million of Series B shares of reorganized Dana, an increase from
the $250 million that Centerbridge had previously agreed to
-- Centerbridge's consent to an amendment to Dana's proposed plan of
reorganization to provide for a cash payment of up to $40 million to
certain general unsecured creditors who are not eligible to purchase
Series B shares because their individual claims are less than $25
million or they are not "qualified institutional investors" as defined
in U.S. securities laws.
-- Dana's agreement not to solicit or entertain any proposal for an
investment, transaction, or plan of reorganization that would be an
alternative to the Centerbridge investment and the elimination of
Dana's right to terminate the Centerbridge investment agreement to
accept any alternative investment or transaction proposal.
The amendment, which is subject to approval by the Bankruptcy Court for
the Southern District of New York, where the company's Chapter 11 bankruptcy
proceeding is pending, is required to be approved by Nov. 15, 2007.
Appaloosa Management Proposal
In conjunction with the Bankruptcy Court's established procedures for
qualified potential investors interested in exploring alternative proposals to
the Centerbridge investment, Appaloosa delivered an offer for an alternative
investment to Dana and the Official Committee of Unsecured Creditors on Sept.
As contemplated by the alternative proposal procedures, Dana's Board of
Directors reviewed and considered Appaloosa's offer. Following discussions
among the parties and the various bankruptcy constituents, Dana's Board
rejected Appaloosa's offer.
About Dana Corporation
Dana is a world leader in the supply of axles; driveshafts; and
structural, sealing, and thermal management products; as well as genuine
service parts. The company's customer base includes virtually every major
vehicle and engine manufacturer in the global automotive, commercial vehicle,
and off-highway markets, which collectively produce more than 65 million
vehicles annually. Based in Toledo, Ohio, the company's continuing operations
employ approximately 35,000 people in 28 countries and reported 2006 sales of
$8.5 billion, with more than half of this revenue derived from outside the
United States. For more information, please visit: www.dana.com.
Dana and certain of its U.S. subsidiaries are operating under Chapter 11
of the U.S. Bankruptcy Code as debtors in possession. Information about the
bankruptcy proceedings can be found at: http://www.dana.com/reorganization.
While Dana continues its reorganization under Chapter 11, investments in its
securities are highly speculative. Although shares of Dana common stock
continue to trade on the OTC Bulletin Board (OTCBB) under the symbol "DCNAQ,"
the opportunity for any recovery by shareholders under a confirmed plan of
reorganization is uncertain.
Chuck Hartlage of Dana Corporation, +1-419-535-4728