Shiloh Industries, Inc. Receives Court Approval of Bidding Procedures
VALLEY CITY, OHIO, September 25, 2020 – Shiloh Industries, Inc. (the “Company”) an environmentally focused global supplier of lightweighting, noise and vibration solutions, today announced that it has received approval from the U.S. Bankruptcy Court for the District of Delaware for the bidding procedures and stalking horse protections in connection with its previously announced stock and asset purchase agreement with Grouper Holdings, LLC (“Grouper”), a subsidiary of MiddleGround Capital LLC (“MiddleGround”). The Company also received final approval for a number of its “First Day” motions related to the Company’s voluntary Chapter 11 petitions filed on August 30, 2020.
Under the approved bidding procedures, interested parties must submit qualified bids to acquire the Company no later than 5:00 PM ET on October 26, 2020. The court-supervised auction is scheduled to be held on October 29, 2020. A final sale approval hearing is expected to take place on November 10, 2020, with the anticipated closing of the successful bid to occur before the end of the year, subject to receipt of applicable regulatory approvals and the satisfaction or waiver of other customary closing conditions. Shiloh’s operations will continue throughout the sale process and the Company will continue to meet customers’ needs.
“The Court approvals received today represent an important milestone for our Company as we continue to work toward improving Shiloh’s financial position for the long term through this court-supervised sale process,” said Cloyd J. Abruzzo, interim chief executive officer of Shiloh. “We continue to take pride in serving our customers and meeting their needs as the automotive industry recovers from the COVID-19 pandemic. We appreciate the support of our customers, partners, and above all, our employees throughout this process.”
The Company also noted that it agreed to an adjournment of the Court hearing regarding final approval for the Company to access $123.5 million in committed debtor-in-possession (“DIP”) financing from its existing lenders, in order to provide the recently formed Creditors’ Committee sufficient time to review the proposed order. Shiloh continues to have sufficient liquidity to operate its business, with access to up to $18.1 million in DIP financing for which the Court previously granted interim approval.
Additional information is available on Shiloh’s restructuring website at www.shilohrestructuring.com, or by calling Shiloh’s Restructuring Hotline at (877) 462-4380 (toll-free in the U.S. and Canada) or (347) 817-4091 (for calls originating outside the U.S. and Canada). Court documents and additional information about the court-supervised process are available on a separate website administered by Shiloh’s claims agent, Prime Clerk, at https://cases.primeclerk.com/shiloh.
Jones Day is serving as legal counsel to Shiloh, Houlihan Lokey Capital Inc. is serving as financial advisor, and Ernst & Young LLP is serving as restructuring advisor.
All statements contained in this press release that are not historical facts are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. The forward-looking statements are made on the basis of management’s assumptions and expectations. As a result, there can be no guarantee or assurance that these assumptions and expectations will in fact occur. The forward-looking statements are subject to risks and uncertainties that may cause actual results to materially differ from those contained in the statements due to a variety of factors, including (1) the duration and severity of the COVID-19 pandemic, any preventive or protective actions taken by governmental authorities, the effectiveness of actions taken globally to contain or mitigate its effects, and any unfavorable effects of the COVID-19 pandemic on either the Company’s manufacturing operations, or those of its customer’s or suppliers; (2) reduction in demand for the Company’s solutions, including any reduction in demand as a result of a COVID-19 triggered economic recession, including any determination that the value of its assets is impaired or that it does not have the ability to continue as a going concern; (3) the Company’s ability to accomplish its strategic objectives; (4) the Company’s ability to obtain future sales; (5) changes in worldwide economic and political conditions, including adverse effects from terrorism or related hostilities; (6) costs related to legal and administrative matters; (7) the Company’s ability to realize cost savings expected to offset price concessions; (8) the Company’s ability to successfully integrate acquired businesses, including businesses located outside of the United States; (9) risks associated with doing business internationally, including economic, political and social instability, foreign currency exposure and the lack of acceptance of the Company’s products; (10) inefficiencies related to production and product launches that are greater than anticipated; (11) changes in technology and technological risks; (12) work stoppages and strikes at the Company’s facilities and that of its customers or suppliers; (13) the Company’s dependence on the automotive and heavy truck industries, which are highly cyclical; (14) the dependence of the automotive industry on consumer spending, which is subject to the impact of domestic and international economic conditions affecting car and light truck production; (15) regulations and policies regarding international trade; (16) financial and business downturns of the Company’s customers or vendors, including any production cutbacks or bankruptcies; (17) increases in the price of, or limitations on the availability of aluminum, magnesium or steel, the Company’s primary raw materials, or decreases in the price of scrap steel; (18) the successful launch and consumer acceptance of new vehicles for which the Company supplies parts; (19) the impact on financial statements of any known or unknown accounting errors or irregularities, and the magnitude of any adjustments in restated financial statements of the Company’s operating results; (20) the Company’s ability to obtain Bankruptcy Court approval with respect to motions in the Chapter 11 Cases; (21) the effects of the Chapter 11 Cases on the Company and on the interests of various constituents; (22) potential delays in the Chapter 11 process due to the effects of the COVID-19 virus; (23) objections to the Stock and Asset Purchase Agreement, DIP Credit Agreement or other pleadings filed that could protract the Chapter 11 Cases; (24) the Bankruptcy Court’s rulings in the Chapter 11 Cases, including the approvals of the terms and conditions of, and the transactions contemplated by, the Stock and Asset Purchase Agreement and the DIP Credit Agreement (25); the outcome of the Chapter 11 Cases in general; (26) the length of time the Company will operate under the Chapter 11 Cases; (27) risks associated with third-party motions in the Chapter 11 Cases; (28) the potential adverse effects of the Chapter 11 Cases on the Company’s liquidity or results of operations and increased legal and other professional costs related to the Chapter 11 Case; (29) the ability of the Company to meet the closing conditions and successfully consummate the Stock and Asset Purchase Agreement; (30) employee attrition and the Company’s ability to retain senior management and other key personnel due to the distractions and uncertainties; (31) the trading price and volatility of the Company’s common stock; (32) increases in pension plan funding requirements; (33) the Company’s ability to derive a substantial portion of its sales from large customers; (34) a successful transition of the CEO position and the Company’s ability to successfully identify a qualified and effective full-time CEO; and (35) other factors besides those listed here could also materially affect the Company’s business. See (a) “Part I, Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2019 and (b) Part II, Item 1A. Risk Factors” in the Company’s Quarterly Reports on Form 10-Q for the fiscal quarters ended January 30, 2020 and April 30, 2020 for a more complete discussion of these risks and uncertainties. Any or all of these risks and uncertainties could cause actual results to differ materially from those reflected in the forward-looking statements. These forward-looking statements reflect management’s analysis only as of the date of this press release. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date of this press release. In addition to the disclosures contained herein, readers should carefully review risks and uncertainties contained in other documents the Company files from time to time with the Securities and Exchange Commission.
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