Fuel motor maker Briggs & Stratton filed for individual bankruptcy on Monday to effectuate a sale of the organization as it faces losses, pending financial debt payments and the coronavirus crisis.
As element of the Chapter 11 filing, non-public equity agency KPS Funds has manufactured a $550 million “stalking horse” offer to buy all of Briggs & Stratton’s property. It will also present $265 million to keep the organization working through the individual bankruptcy method.
The filing came soon after Briggs issued a heading-problem warning and employed restructuring advisers in May possibly to assistance address its financial debt load.
“Over the previous various months, we have explored numerous selections with our advisers to fortify our economical place and overall flexibility,” CEO Todd Teske stated in a news release. “The worries we have confronted through the COVID-19 pandemic have manufactured reorganization the challenging but necessary and suitable route ahead to protected our enterprise.”
The coronavirus pandemic had added to Briggs’ liquidity challenges as the organization shuttered plants and its clients decreased orders. Its income fell by 18{79e59ee6e2f5cf570628ed7ac4055bef3419265de010b59461d891d43fac5627} to $474 million in the third quarter ended March 29 and it was anticipating a $157 million income strike from the pandemic for the fourth quarter.
Briggs, which was launched in 1908 by inventor Stephen Briggs and investor Harold Stratton, tends to make engines that are employed largely by the lawn and yard tools sector for lawn mowers, yard tillers, and snow throwers. Its solutions are bought in more than a hundred nations.
According to the Milwaukee Journal Sentinel, the organization was “losing funds and burdened by large debts when the financial downturn induced by the coronavirus pandemic strike.”
As of March 31, Briggs had quick-phrase financial debt of $597.5 million and prolonged-phrase financial debt of $seven million. The quick-phrase financial debt contains $195.5 million in bonds thanks in December that had to be refinanced by Sept. 15 or the organization would be in violation of its bank loan agreements with a consortium of financial institutions, enabling them to need rapid compensation.
KPS Capital’s bid sets a minimum amount cost for Briggs’ property. “KPS intends to develop the new Briggs & Stratton aggressively by way of strategic acquisitions,” Co-Managing Lover Michael Psaros stated.
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