Pace Industries, an aluminium, zinc and magnesium die casting company has filed a chapter 11 bankruptcy for its US subsidiaries. The company located at Fayetteville in Arkansas operates a range of clamping force die-casting machines in North America. The company’s Mexico operations, however, will remain unaffected by these filings, the company announced. With support from note-holders and lenders, the company is expected to conclude this process in the second quarter of 2020.
The step will give it a financial foundation to resume the normal course of operations following COVID-19 outbreak, according to the company. Noteholders and lenders will provide commitment up to $175mn in debtor-in-possession financing.
Scott Bull, Chief Executive Officer said that the company could not secure benefits from the cost-saving initiatives launched for automotive industries before COVID-19 affected the demand and supply chain. The company was thus compelled to temporarily shut down many plants in the US.
With the help of customary motion, the company will be able to maintain employee wage and benefits programme and will be able to honour customer warranties and clear the dues of suppliers, mentions the statement.