Dana Holding Corporation (ticker: DAN, exchange: New York Stock Exchange (.N))
News Release -
Dana Corporation's U.S. Operations File for Chapter 11 Reorganization to Address Financial and Operational Challenges
All Dana Facilities Open, Normal Operations Continue;
Company Obtains $1.45 Billion DIP Financing Commitment from Bank Group
TOLEDO, Ohio, March 3 /PRNewswire-FirstCall/ -- Dana Corporation
(NYSE: DCN) announced today that in order to address financial and operational
challenges that have hampered its performance, the company and 40 of its U.S.
subsidiaries have filed voluntary petitions for reorganization under Chapter
11 of the U.S. Bankruptcy Code. Dana's European, South American, Asia-
Pacific, Canadian and Mexican subsidiaries are not included in the Chapter 11
filing and are operating as normal. The filings were made today in the U.S.
Bankruptcy Court for the Southern District of New York.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA )
Company Obtains $1.45 Billion DIP Financing Commitment
To fund its continuing operations during the restructuring, Dana has
secured a $1.45 billion debtor-in-possession (DIP) financing facility from
Citigroup, Bank of America, N.A., and JP Morgan Chase Bank, N.A. Subject to
court approval, the DIP credit facility, which replaces the company's previous
$400 million revolving credit facility and $275 million receivables
securitization facility, will be used for the company's normal working capital
requirements, including employee wages and benefits, supplier payments, and
other operating expenses during the reorganization process.
Dana has faced a continued decline in revenues resulting from the
decreasing market share and production levels of its largest domestic
customers, along with sharp increases in commodity and energy prices that have
outpaced the cost savings Dana has been able to achieve. The general
financial condition of the industry, together with Dana's inability to renew
or expand its credit facilities in a timely manner, has significantly
constrained Dana's liquidity.
As a result, the company concluded, after thorough consultation with its
advisors, that its interests and the interests of its creditors, employees,
customers, suppliers, and the communities in which it operates would be best
served by reorganizing under Chapter 11 of the U.S. Bankruptcy Code.
A Necessary and Responsible Step to Achieve a Stable and Profitable Future
Dana Chairman and Chief Executive Officer Michael J. Burns said, "The
Chapter 11 process provides the company an opportunity to fix our business
comprehensively -- financially and operationally. This will be fundamental
change, not just incremental improvement. The Chapter 11 process allows us to
continue normal business operations, while we restructure our debt and other
obligations and enhance performance.
"We want to assure everyone -- our customers, suppliers, our people and
our communities -- that Dana is open for business as usual," he added. "And,
to this end, our customers can continue to rely on Dana for quality products
-- delivered on time and to best-in-class specification.
"This is an extremely difficult, but necessary and responsible decision
that will provide us with the time and opportunity to strengthen our
performance and achieve a sustained turnaround at Dana."
Mr. Burns said Dana intends to proceed with its previously announced
divestiture and restructuring plans, which include the sale of several non-
core businesses and the closure of several facilities and shift of production
to lower-cost locations. In addition, Dana will continue to take steps to
reduce costs, increase efficiency, and enhance productivity, he said.
Company Files First-Day Motions to Support Key Stakeholders
Dana has filed "First-Day Motions" in the Bankruptcy Court in New York
designed to ensure that the company's business continues to function without
disruption. The court filings are intended to ensure that the company can
continue to pay its employees and suppliers and maintain uninterrupted
delivery of products and services to its customers.
Dana reported total assets of approximately $7.9 billion and total
liabilities of approximately $4.7 billion, on a consolidated basis, as of
September 30, 2005.
Dana's legal advisor in the Chapter 11 filing is Jones Day. The company's
financial advisor is Miller Buckfire and restructuring advisor is
More information about Dana's filings is available on the company's Web
site at: http://www.dana.com.
About Dana Corporation
Dana people design and manufacture products for every major vehicle
producer in the world. Dana is focused on being an essential partner to
automotive, commercial, and off-highway vehicle customers, which collectively
produce more than 60 million vehicles annually. A leading supplier of
drivetrain, chassis, structural, and engine technologies, Dana employs 46,000
people in 28 countries. Based in Toledo, Ohio, the company reported sales of
$9 billion in 2004. Dana's Internet address is: http://www.dana.com/.
Statements in this release which are not entirely historical constitute
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements represent Dana's expectations
based on our current information and assumptions. However, forward-looking
statements are inherently subject to risks and uncertainties. Dana's actual
results could differ materially from those expressed or implied in such
statements due to a number of factors. These factors include Dana's ability
to continue as a going concern, operate pursuant to the terms of the debtor-
in-possession ("DIP") facility, obtain court approval with respect to motions
in the Chapter 11 proceeding from time to time, and develop and implement a
plan of reorganization under Chapter 11; Dana's ability to obtain and maintain
normal terms with vendors and service providers and maintain contracts that
are critical to its operations; the potential adverse impact of the Chapter 11
cases on Dana's liquidity or results of operations; Dana's ability to fund and
execute its business plan and its ability to attract, motivate and/or retain
key employees; Dana's ability to attract and retain customers; and other risk
factors set out in our public filings with the Securities and Exchange
Commission. Dana does not undertake to update any forward-looking statements
in this release.
SOURCE Dana Corporation
CONTACT: Chuck Hartlage of Dana Corporation, +1-419-535-5401
7888 03/03/2006 11:21 EST http://www.prnewswire.com