Newcor Inc. plans to emerge from Chapter 11, with a full payment to secured creditors and a share in nearly $50 million for unsecured creditors.
The Royal Oak, Mich.-based company, which earns 19 percent of its sales from its plastics and rubber division, filed in February for Chapter 11 protection in U.S. Bankruptcy Court in Wilmington. In an Oct. 15 filing, it announced it will continue ``as a going concern.''
``Under the proposed plan, Newcor will emerge a financially stronger company with no disruption of parts and services that we now provide our customers,'' President and co-Chief Executive Officer James Connor said in a news release.
Majority owner EXX Inc., a Las Vegas holding company, will provide a guarantee for at least part of the $150 million restructuring. Unsecured creditors will receive a prorated share of $28 million in new notes and $20 million in cash. Newcor also had secured creditors, including $125 million in senior notes.
The court and creditors still must give final approval to the restructuring plan before the company can exit Chapter 11, but the business has set a goal of regaining its independence by the end of the year.
Newcor ended 2001 with $47 million in net losses on sales of $177 million, and has not posted a profit since the second quarter of 2000. The company makes a variety of machined metal parts and rubber and plastic components for the auto industry, including steering column pieces, air-conditioning ducts, clips and brackets.