NEW YORK/BANGALORE (Reuters) - Champion Enterprises Inc CHB.N said on Sunday the company and its domestic operating subsidiaries filed for bankruptcy, and that it hopes to go through a court-supervised sale of its U.S. operations.
The factory-built construction company said it had obtained a $40 million debtor-in-possession credit facility from lenders, a portion of which would be used for operations outside the United States.
The company listed total assets of $576.5 million and total debt of $521.3 million, according to a petition filed in the U.S. Bankruptcy Court for the District of Delaware in Wilmington.
The company’s operations in the United Kingdom and Canada were not included in the petitions.
Last month, the company signed a waiver and forbearance agreement with its lenders, who also agreed to forbear from accelerating the maturity of the loans outstanding under the credit agreement.
In August, the Troy, Michigan-based company said it was not in compliance with its financial covenants and was in discussions with a third party that has expressed interest in making an investment in the company.
Champion said on Sunday it had chosen a sale process in which its lenders may participate after opting not to accept a third-party offer.
The company also said its investment banker had “already received initial indications of interest from a number of parties expressing a desire to participate in this sale process.”
“Our company has operated for many years with a significant debt load,” Champion Chief Executive William Griffiths said. “Despite our best efforts to reposition the company for diversified growth, the continued challenging economic conditions...have negatively impacted our capacity for debt.”
Champion said daily operations would continue throughout the restructuring.
“Our balance sheet is the problem, not our operations,” Griffiths said. “The next step...is to restructure our balance sheet and position our company to capitalize on the anticipated recovery in the residential and commercial construction markets,” he added.
Shares of the company closed at 20 cents a share Friday on the New York Stock Exchange.
The case is In re: Champion Enterprises Inc, U.S. Bankruptcy Court, District of Delaware, No 09-14019.
Reporting by Jui Chakravorty in New York and Supantha Mukherjee in Bangalore; Editing by Muralikumar Anantharaman