Marelli Plans to Emerge from Bankruptcy by 2026

According to foreign media reports, on July 29, Japanese auto parts supplier Marelli Holdings announced that a consortium led by the American investment firm Strategic Value Partners (SVP) would provide support to help the company return to profitability, with the goal of emerging from bankruptcy protection by next year.

The consortium of five lending institutions, which are also creditors of Marelli, includes Germany's Deutsche Bank and Asian private equity firm MBK Partners among its members. In accordance with Chapter 11 of the U.S. Bankruptcy Code, after the 45-day “bidding period” (during which more competitive acquisition proposals could be submitted) ended on July 29, the consortium was officially confirmed as Marelli’s restructuring investor.

Image source: Marelli

Previously, the United States Bankruptcy Court for the District of Delaware approved Marelli's use of $130 million in debtor-in-possession (DIP) financing during bankruptcy protection, which is an additional amount on top of the $519 million in financing the company had already obtained. This funding will be used to pay commercial partner payments and other expenses.

David Slump, President and CEO of Marelli, stated in a release on July 29 that the company is "working collaboratively with the prospective controlling party to advance the restructuring process." He also added that Marelli looks forward to cooperating with the consortium to "ensure a seamless and smooth transition of ownership upon exit from bankruptcy protection."

On June 11 this year, Marelli voluntarily filed for Chapter 11 bankruptcy protection with the Delaware Bankruptcy Court in the United States to comprehensively restructure its long-term debt. Approximately 80% of creditors have signed an agreement supporting the restructuring, which will effectively reduce Marelli's debt-to-asset ratio and significantly improve its liquidity position.

Marelli Corporation stated that it expects the bankruptcy protection proceedings will not affect its daily operations. The company will continue to work closely with customers, suppliers, and partners, and will keep investing in innovation resources to develop an advanced technology portfolio.

Marelli was formed by the merger of Calsonic Kansei, a major supplier of Nissan Motor, and the large Italian automotive parts manufacturer Magneti Marelli. It is reported that Nissan Motor's recent operational difficulties are an important reason for Marelli's deteriorating financial condition.