SeaEric
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By IBI Magazine
Genmar Holdings, the second-largest boatbuilder in the US, filed for Chapter 11 bankruptcy protection on Monday. A petition filed in the US Bankruptcy Court in Minnesota listed the assets of the company as US$237.5m, with liabilities of US$216.5m.
Genmar chairman Irwin Jacobs told the Minneapolis Star-Tribune that the the bankruptcy petition does not include more than US$400m in intangible assets. Wells Fargo and Fifth Third bank, the only secured creditors, are owed US$75m. The bankruptcy petition also listed 20 other creditors.
"If someone would have said to me as recently as even one month ago that Genmar would someday be filing for Chapter 11, I would have said it was not even a remote possibility," said Jacobs in a statement. "I've always looked for ways to enhance Genmar's balance sheet and felt that even though business conditions were incredibly difficult, there were alternatives available." But Jacobs told the paper that tighter loan requirements from the bank pushed it into Chapter 11 bankruptcy protection. "Despite restructuring steps and infusion of significant equity, the bank reduced [credit] availability," its bankruptcy documents read. "The bank rejected all...proposals for making adequate capital available and continued to reduce the borrowing base."
According to the story, Jacobs holds about 40 per cent of the company's stock, and other major shareholders include the family of the late Carl Pohlad, which holds about 15 per cent.
"Genmar has received a commitment for Debtor-in-Possession (DIP) financing proposal from the Wells Fargo and Fifth Third banks that will be submitted for approval to the bankruptcy court in the first bankruptcy hearing scheduled to take place within the next few days," said Jacobs. "Additionally in the first court hearing, Genmar will be asking the bankruptcy court for approval to allow Genmar to pay appropriate dealer warranty and rebate claims. Genmar currently has over $100m of current assets as well as substantial additional fixed assets and intangible assets that we believe will allow Genmar to come through and exit the Chapter 11 proceedings as a financially stable and strong company."
None of Jacobs' other companies, which includes Jacobs Trading, Jacobs Management, Watkins, FLW Outdoors or Jacobs Interactive, are included in the bankruptcy filings. The filing also does not include VEC Technology LLC.
Jacobs said Genmar's revenues for the year ending June 30 should drop by more than half to about US$460m. The company will have an operating loss of $32m to $35m for the year, compared with a cash operating profit of US$9.7m in 2008.
In order to control costs, Jacobs said, Genmar has cut its workforce in the last 18 months from about 4,500 to about 1,500. Genmar has more than 1,000 dealers, but that number has declined by about 20 per cent since early 2008. Jacobs told the paper that about 30 per cent of Genmar's current dealers "are just hanging on."
"We believe that Genmar will have access to sufficient cash and has current assets available to support our ongoing businesses to service and build dealer boat orders and pay our vendor suppliers on future purchases promptly," Jacobs said in the statement. "I have every reason to believe that GE Finance will continue their Genmar dealer floor plan financing program subject to the Court's approval, which will take place over the next few days."
Jacobs said the company will submit its reorganisation plan "as soon as possible." The plan will include "Genmar's short and long-term plans and objectives in ultimately successfully exiting the Chapter 11 proceedings," Jacobs added.
(2 June 2009)
Genmar Holdings, the second-largest boatbuilder in the US, filed for Chapter 11 bankruptcy protection on Monday. A petition filed in the US Bankruptcy Court in Minnesota listed the assets of the company as US$237.5m, with liabilities of US$216.5m.
Genmar chairman Irwin Jacobs told the Minneapolis Star-Tribune that the the bankruptcy petition does not include more than US$400m in intangible assets. Wells Fargo and Fifth Third bank, the only secured creditors, are owed US$75m. The bankruptcy petition also listed 20 other creditors.
"If someone would have said to me as recently as even one month ago that Genmar would someday be filing for Chapter 11, I would have said it was not even a remote possibility," said Jacobs in a statement. "I've always looked for ways to enhance Genmar's balance sheet and felt that even though business conditions were incredibly difficult, there were alternatives available." But Jacobs told the paper that tighter loan requirements from the bank pushed it into Chapter 11 bankruptcy protection. "Despite restructuring steps and infusion of significant equity, the bank reduced [credit] availability," its bankruptcy documents read. "The bank rejected all...proposals for making adequate capital available and continued to reduce the borrowing base."
According to the story, Jacobs holds about 40 per cent of the company's stock, and other major shareholders include the family of the late Carl Pohlad, which holds about 15 per cent.
"Genmar has received a commitment for Debtor-in-Possession (DIP) financing proposal from the Wells Fargo and Fifth Third banks that will be submitted for approval to the bankruptcy court in the first bankruptcy hearing scheduled to take place within the next few days," said Jacobs. "Additionally in the first court hearing, Genmar will be asking the bankruptcy court for approval to allow Genmar to pay appropriate dealer warranty and rebate claims. Genmar currently has over $100m of current assets as well as substantial additional fixed assets and intangible assets that we believe will allow Genmar to come through and exit the Chapter 11 proceedings as a financially stable and strong company."
None of Jacobs' other companies, which includes Jacobs Trading, Jacobs Management, Watkins, FLW Outdoors or Jacobs Interactive, are included in the bankruptcy filings. The filing also does not include VEC Technology LLC.
Jacobs said Genmar's revenues for the year ending June 30 should drop by more than half to about US$460m. The company will have an operating loss of $32m to $35m for the year, compared with a cash operating profit of US$9.7m in 2008.
In order to control costs, Jacobs said, Genmar has cut its workforce in the last 18 months from about 4,500 to about 1,500. Genmar has more than 1,000 dealers, but that number has declined by about 20 per cent since early 2008. Jacobs told the paper that about 30 per cent of Genmar's current dealers "are just hanging on."
"We believe that Genmar will have access to sufficient cash and has current assets available to support our ongoing businesses to service and build dealer boat orders and pay our vendor suppliers on future purchases promptly," Jacobs said in the statement. "I have every reason to believe that GE Finance will continue their Genmar dealer floor plan financing program subject to the Court's approval, which will take place over the next few days."
Jacobs said the company will submit its reorganisation plan "as soon as possible." The plan will include "Genmar's short and long-term plans and objectives in ultimately successfully exiting the Chapter 11 proceedings," Jacobs added.
(2 June 2009)
