Cooper Standard to generate $355 million by revising Chapter 11 plan

ERJ staff report (DS)

Novi, Michigan -- Cooper-Standard Holdings Inc., the parent company of Cooper-Standard Automotive Inc., has agreed a plan to raise an extra $355 million in new equity. The money will be raised through a Rights Offering among existing debt-holders. The Amended Plan, the Rights Offering, and all related transactions have the full support of the Official Committee of Unsecured Creditors.

The new Equity Commitment Agreement replaced the original commitment agreement, which was executed on February 1, 2010 and provided for a direct investment and an equity rights offering, totaling $245 million.

Under the Amended Plan, the Company's debt will fall significantly to around $480 million. This represents a reduction of over $650 million from pre-petition levels.

“The proposed $355 million equity investment is a strong vote of confidence in Cooper-Standard and significantly improves the recoveries to the Company's stakeholders over those of the original plan,” said James S. McElya, chairman and chief executive officer of the Company. “The Company is now positioned to emerge from bankruptcy in the near term on a consensual basis with a strong balance sheet while maintaining our leadership position in the industry.”

Cooper-Standard went into Chapter 11 protection in August 2009 with the aim of restructuring debts of $1800 million, following a 2004 buyout of the company from former parent, Cooper Tire & Rubber Co. The buyout was funded mainly by Goldman Sachs Group Inc. (GS) and private-equity firm Cypress Group.

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Press release from Cooper-Standard