TORONTO — Auto parts maker Versatech Group Inc. said its main banker has demanded full payment for all debts and liabilities owed the bank by Versatech and related companies. Versatech owed Canadian Imperial Bank of Commerce C$78.5 million (US$52.8 million) on April 30, the Toronto firm said in its May 3 announcement. CIBC said it will "enforce its security" if full payment is not received by May 15.
Versatech has begun negotiations with CIBC "but there can be no assurance that a resolution will be reached," Versatech said in a news release. CIBC will permit Versatech to use its existing line of credit until the deadline, according to the auto parts company.
Company officials could not be reached for comment. Versatech stock closed at C$0.39 (US$0.262) on May 4, a cent lower than its previous 52-week low. Its 52-week high was C$1.90 (US$1.28).
Versatech sold its PaintPlas Inc. division to the former owners last month. At that time Versatech said the deal cut its debt obligations by C$43 million (US$28.9 million) and resulted in a gain of C$24 million (US$16.1 million). Ian Macdonald, Versatech chief executive officer, said the Ajax, Ontario, painting division was not a cost-effective operation for his firm's injection molding business.
Versatech's operating subsidiaries in the United States, Canada and Mexico make interior and exterior door-handle assemblies, interior trim, molded plastic components, plastic/metal and rubber subassemblies for under-the-hood and powertrain systems, plastic tooling and reusable auto-part-packaging systems. It has seven operating subsidiaries and a joint venture and employs about 1,750.