Spectra Premium Industries Inc. has sought protection to restructure its operations and its debt, while continuing normal operations.
The Boucherville, Que.-based manufacturer of cooling systems, fuel delivery, ignition and engine management, climate control, and undercar components, has made application under the Companies’ Creditors Arrangement Act (CCAA) to the Quebec Superior Court of Justice.
It has also initiated a corresponding Chapter 15 filing in the United States, to recognize and give effect to the Canadian filing.
“Our senior management team believes that this decision, difficult as it may be, remains the best option to move the organization forward with the greatest prospect of future success,” said Jacques Mombleau, president and CEO of Spectra Premium Industries.
He said the company has taken “aggressive action” throughout 2019, to curtail costs, enhance productivity, and develop new business segments.
“However, these efforts were hampered by challenging conditions in its aftermarket division,” he said, “particularly with the impact of tariffs imposed on Chinese products by the United States that disturb the supply chain and with difficulties encountered in the start-up of our new fuel tank factory in Trollhättan, Sweden.”
He said today’s actions are intended to ensure the continuation of the business.
“We are conducting business as usual,” he said. “All orders will continue to be shipped as agreed. We expect that Spectra Premium will emerge stronger and better able to compete as an advanced manufacturer.”
Spectra Premium will use its available credit facilities to provide adequate liquidity to operate while it restructures its operations and its debt.
The court has appointed Ernst & Young Inc. to act as monitor over the business, with a website at www.ey.com/ca/spectra where further information on Spectra Premium’s financial restructuring will be posted.
Lavery de Billy LLP and Norton Rose Fulbright US LLP represent the company as outside Canadian and U.S. legal counsel, respectively.