Mecachrome, French units granted CCAA, safeguard protection amid review of strategic alternatives

By Caroline Salls

Pittsburgh, Dec. 15 - Mecachrome International Inc. has obtained court protection under the Companies' Creditor Arrangement Act (Canada), and its French subsidiaries have obtained similar protection under the safeguard procedure in France amid an ongoing review of the company's strategic alternatives to improve liquidity and reduce financing costs, according to a company news release.

Mecachrome said it is also in advanced discussions with potential lenders to secure debtor-in-possession financing to support the company during the restructuring.

"Our goal is to allow Mecachrome to continue to operate as a going concern for the benefit of all those affected," president and chief executive officer Christian Jacqmin said in the release.

"We believe that the steps we are taking today, combined with the financing we are in the process of finalizing, will provide us with the ability to protect the value of the business for our stakeholders.

"Today's filings are the result of industry-wide challenges in our business segments, combined with Mecachrome's leverage and its inability to raise capital in the current market environment.

"The steps we initiated today will allow Mecachrome to make the necessary changes to ensure its long-term viability."

The company said it has retained RBC Capital Markets to act as its financial adviser, and Ernst & Young Inc. will serve as court-appointed monitor during the CCAA process.

While under the CCAA protection, Mecachrome said it will continue its efforts to recapitalize.

In addition, the company said the Toronto Stock Exchange has decided to delist its subordinate voting shares at the close of the market on Jan. 9 for failure to meet continued listing requirements.

Mecachrome is a Montreal-based designer, manufacturer and assembler of precision-engineered industrial components for the automotive and aerospace industries in Europe and North America.

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