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Fri, Jun 15, 2012

Northstar Aerospace Announces CCAA And Chapter 11 Filings

Move Intended To Facilitate Sale Of The Copmpany

Northstar Aerospace said Thursday that after full consideration of all its available alternatives, its U.S. subsidiaries, Northstar Aerospace (USA) Inc., Northstar Aerospace (Chicago) Inc., Derlan USA Inc. and D-Velco Manufacturing of Arizona, Inc. have filed Chapter 11 petitions in the United States Bankruptcy Court for the District of Delaware. The Corporation, Northstar Aerospace (Canada) Inc. and certain of its Canadian subsidiaries are applying for an Initial Order from the Ontario Superior Court of Justice (Commercial Division) under the Companies' Creditors Arrangement Act ("CCAA"). The main purpose of the filings is to effectuate a going concern sale of the business.

The Corporation will be requesting CCAA protection for an initial period of 30 days, expiring on July 14, 2012. While under CCAA and Chapter 11 protection, creditors and others are stayed from pursuing any claims or enforcing any rights against the filing entities.

The Corporation's Board of Directors have elected to resign their positions concurrently with the CCAA filing. The Corporation is seeking the appointment of FTI Consulting Canada, Inc., as Chief Restructuring Officer under the Initial Order. The Corporation also is proposing that Ernst & Young Inc. be appointed as monitor in the CCAA proceeding (the "Monitor"). It is intended that Northstar's operations will continue uninterrupted during the CCAA and Chapter 11 proceedings and obligations to employees and suppliers of goods and services provided after the filing date will continue to be met.

Northstars existing secured lenders have agreed to provide additional debtor-in-possession ("DIP") financing of up to U.S. $4 million during the CCAA and Chapter 11 proceedings, subject to customary terms and conditions. Northstar has also obtained additional DIP financing of up to U.S. $7 million, subject to customary terms and conditions from Boeing Capital Loan Corporation. The Corporation has entered into an asset purchase agreement, subject to approval of the Courts (the "APA") with Heligear Acquisition Co. and Heligear Canada Acquistion Corporation, affiliates of Wynnchurch Capital, Ltd., pursuant to which substantially all of the assets of Northstar will be sold for an aggregate purchase price of approximately U.S. $70 million, together with the assumption of certain liabilities.

This "stalking horse bid" will be subject to a competitive bidding procedure, whereby, higher and better offers may be obtained. The bidding procedure and timelines are subject to approval of the Courts, but it is currently anticipated that the deadline for superior bids will be on or around July 14, 2012. If no superior offers are received, there would be insufficient proceeds to repay Northstar's secured creditors and consequently no proceeds to pay any of the Corporation's unsecured creditors or shareholders.



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