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January 4, 2008 |
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DANA CORP: 24 Investor Groups to Buy US$540 Mln New Dana Shares Dana Corp. and its debtor-affiliates sought and obtained permission from the U.S. Bankruptcy Court for the Southern District of New York to file an Allocation Report, indicating Participating Claims totaling more than US$1.5 billion that were allocated 5.4 million shares of New Series B Preferred Stock on a pro rata basis, under seal. Dana entered into an Investment Agreement dated July 26, 2007, with Centerbridge Capital Partners, L.P.; Centerbridge Capital Partners Strategic, L.P., as successor by assignment from CBP Parts Acquisition Co. LLC; Centerbridge Capital Partners SBS, L.P., as successor by assignment from CBP Parts. The Investment Agreement allows for US$790 million cash infusion in the Reorganized Debtors. Centerbridge will purchase US$250 million in aggregate liquidation preference of New Series A Preferred Stock and qualified creditors of the Debtors who are Qualified Investors will have an opportunity to purchase an additional US$540 million in aggregate liquidation preference of New Series B Preferred Stock on a pro rata basis. To be permitted to invest to purchase a pro rata share of the Series B Shares, the Investment Agreement required parties, among other things, be a "Qualified Investor" under the Investment Agreement and to deliver a duly executed Subscription Agreement prior to 5:00 p.m. EST on Dec. 5, 2007. To be a "Qualified Investor," a party was required, among other things, to (a) beneficially own "Qualified Bond Claims," "Acquired Bond Claims" or "Qualified Trade Claims" in excess of US$25 million by certain dates and (b) timely execute and deliver a signature page to the Plan Support Agreement dated July 26, 2007, among Dana, United Steelworkers, International Union, UAW, Centerbridge Capital Partners, L.P. and certain Dana creditors. The BMC Group, Inc., as Subscription Agent for the Debtors, mailed subscription agreements and instructions for subscription on Nov. 2, 2007, to all parties that the Debtors reasonably believed might be entitled to participate in the subscription based upon information available at that time. Corinne Ball, Esq., at Jones Day in New York, reports that as of Dec. 26, 2007, BMC has received, excluding duplicates, 106 Subscription Agreements from 96 entities constituting 24 investors -- if affiliated entities are counted as one investor. BMC and the Debtors have since undertaken to reconcile the information that was submitted in the subscription agreements. The Debtors have reviewed the information received by BMC and other relevant information, which has been shared with counsel to the Ad Hoc Committee of Dana Noteholders and counsel to the Official Committee of Unsecured Creditors, Ms. Ball says. Based on the information and other numerous meetings at which they consulted with the Ad Hoc Committee and the Creditors' Committee, the Debtors have determined and have prepared a report setting forth: (a) which parties will purchase Series B Shares as part of the subscription process; and (b) the number of Series B Shares to be allocated to each Subscribing Investor for purchase. The Debtors believe that the allocation of New Series B Preferred Stock is commercially sensitive information to them. Publicly disclosing the holdings of preferred shareholders is confidential information that is not customarily disclosed unless and until Securities Exchange Act of 1934 rules require the shareholder to file with the Securities and Exchange Commission after crossing a specified threshold of ownership percentage (generally 5%). The Debtors believe that publicly publishing the individual allocations of New Series B Preferred Stock would only serve to potentially cause delays in the Debtors' ability to obtain the necessary funds. In addition, counsel to the Ad Hoc Committee has advised the Debtors that the Subscribing Investors prefer that their exact holdings in New Series B Preferred Stock not be publicly disclosed because such parties consider their individual allocated holdings to be confidential commercial information. A full-text copy of the redacted version of the Allocation Report identifying each of the Subscribing Investors without identifying the number of shares of New Series B Preferred Stock being allocated to each party, is available at no charge at: http://bankrupt.com/misc/DANA_Subscribing_Investors.pdf Ms. Ball relates the Debtors are providing individualized notices to each Subscribing Investor of, among other things: (a) the number of shares of New Series B Preferred Stock allocated to them; (b) instructions for submitting payment for the shares by Dec. 28, 2007; and (c) information regarding additional documentation that must be completed prior to a Subscribing Investor's receipt of its allocated New Series B Preferred Stock. About Dana Based in Toledo, Ohio, Dana Corporation -- http://www.dana.com/ -- designs and manufactures products for every major vehicle producer in the world, and supplies drivetrain, chassis, structural, and engine technologies to those companies. Dana employs 46,000 people in 28 countries. 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. Dana has facilities in China in the Asia-Pacific, Argentina in the Latin-American regions and Italy in Europe. The company and its affiliates filed for chapter 11 protection on March 3, 2006 (Bankr. S.D.N.Y. Case No. 06-10354). As of Aug. 31, 2007, the Debtors listed US$6,878,000,000 in total assets and US$7,551,000,000 in total debts resulting in a total shareholders' deficit of US$673,000,000. Corinne Ball, Esq., and Richard H. Engman, Esq., at Jones Day, in Manhattan and Heather Lennox, Esq., Jeffrey B. Ellman, Esq., Carl E. Black, Esq., and Ryan T. Routh, Esq., at Jones Day in Cleveland, Ohio, represent the Debtors. Henry S. Miller at Miller Buckfire & Co., LLC, serves as the Debtors' financial advisor and investment banker. Ted Stenger from AlixPartners serves as Dana's Chief Restructuring Officer. Thomas Moers Mayer, Esq., at Kramer Levin Naftalis & Frankel LLP, represents the Official Committee of Unsecured Creditors. Fried, Frank, Harris, Shriver & Jacobson, LLP serves as counsel to the Official Committee of Equity Security Holders. Stahl Cowen Crowley, LLC serves as counsel to the Official Committee of Non-Union Retirees. The Debtors filed their Joint Plan of Reorganization on Aug. 31, 2007. On Oct. 23, 2007, the Court approved the adequacy of the Disclosure Statement explaining their Plan. The Court has set Dec. 10, 2007, to consider confirmation of the Plan. (Dana Corporation Bankruptcy News, Issue No. 67; Bankruptcy Creditors' Service Inc., http://bankrupt.com/newsstand/ or 215/945-7000). |
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