New Company Formed by the Carlyle Group and Solus Acquires Most of Metaldyne's Assets

PLYMOUTH, Mich., Aug. 7 /PRNewswire/ -- Metaldyne Corporation announced today the auction of substantially all of their assets concluded yesterday and MD Investors Corporation, having submitted the highest and best bid, was named the successful bidder.

Metaldyne also had a hearing at which it sought approval of the sale from the U.S. Bankruptcy Court for the Southern District of New York. A favorable ruling from the Court is anticipated next week. The sale would involve Metaldyne's Powertrain, Balance Shaft Module, Tubular Products, and Chassis assets to MD Investors.

MD Investors is a new company formed by a coalition of Metaldyne's existing term lenders led by The Carlyle Group, a well-respected private equity firm, and Solus Alternative Asset Management LP, an SEC-registered investment advisor.

MD Investors has agreed to purchase most of the company's assets under a 363 sale. Under U.S. bankruptcy law, a 363 sale allows a sale of assets on a going concern basis prior to confirmation of a plan of reorganization where a good business reason exists. The sale is the result of a process commenced after the filing by Metaldyne and its U.S. subsidiaries of voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code on May 27.

Under the terms of the parties' asset purchase agreement, MD Investors will purchase the following assets:

• All of Metaldyne's Sintered Products, European Forgings and Vibration Controls Products operations located in Europe, Asia, Brazil, Mexico and the United States
• Plants in Bluffton, Ind.; Litchfield, Mich., and, subject to certain conditions, Twinsburg, Ohio
• Metaldyne's balance shaft module operations, which are located at Metaldyne's plants in Fremont, Ind., and Pyeongtaek, Korea
• Metaldyne's tubular products operations housed at Metaldyne's Hamburg, Mich., plant, which produces fabricated exhaust manifolds and other tube-formed products
• Metaldyne's' chassis operations in Edon, Ohio; Barcelona, Spain, Iztapalapa, Mexico, and subject to certain conditions, operations in Greensboro, N.C.
  

"We are very pleased Carlyle, Solus, and a group of our term lenders have agreed to purchase substantially all of Metaldyne's businesses," said Thomas A. Amato, chairman, president and CEO of Metaldyne. "It has always been our plan to divest our better performing operations in connection with our overall Chapter 11 restructuring. We believe the sale of these businesses as a going concern represents the best way to continue to serve our customers and preserve as many jobs as possible.

"We are also pleased Metaldyne is moving through the bankruptcy process swiftly and on plan. The highly competitive sale process in this challenging market is a testament to the strength of our businesses, technology and the commitment of our employees."

Under the purchase agreement, MD Investors is purchasing the assets with a combination of cash, assumption of liabilities, a "credit bid" and other forms of valuable consideration. In particular, MD Investors is paying approximately $40 million in cash, assuming certain liabilities, including certain obligations to Metaldyne's suppliers, and is credit bidding more than $400 million of secured term debt. MD Investors has also agreed to provide various other forms of valuable consideration to unsecured creditors.

The proposed sale transaction has the support of virtually all of Metaldyne's stakeholders, including customers, other secured lenders, the committee of unsecured creditors and, of course, employees. Metaldyne hopes to consummate the sale in the upcoming weeks.

Metaldyne and its U.S. subsidiaries filed for bankruptcy primarily as a result of liquidity, excess leverage and pension and lease costs compounded by the unusually low production volumes in the North American automotive industry. The filing did not include the company's non-U.S. entities or operations. Metaldyne has a $19.85 million debtor-in-possession (DIP) facility in place with agent bank Deutsche Bank AG, New York, funded by certain of Metaldyne's OEM customers.

For access to certain court documents and other information about Metaldyne's Chapter 11 case, please visit www.metaldynerestructuring.com.

About Metaldyne

Metaldyne is a wholly owned subsidiary of Asahi Tec, a Shizuoka, Japan-based chassis and powertrain component supplier in the passenger car/light truck and medium/heavy truck segments. Asahi Tec is listed on the Tokyo Stock Exchange.

Metaldyne is a leading global designer and supplier of metal based components, assemblies and modules for transportation related powertrain and chassis applications including engine, transmission/transfer case, wheel end and suspension, axle and driveline, and noise and vibration control products to the motor vehicle industry.

Headquartered in Plymouth, Mich., Metaldyne had revenues in 2008 of approximately $1.57 billion. Metaldyne employs more than 4,400 employees at 33 facilities in 14 countries. For more information go to www.metaldyne.com.

Forward Looking Statement

This press release contains statements that are not statements of historical fact, but instead are forward-looking statements, as that term is defined by the federal securities laws. We caution readers not to place undue reliance on these forward-looking statements, which reflect management's expectations, estimates and assumptions based on information available as of the date hereof. Important factors that could cause actual results to vary materially from those expressed or implied by the forward-looking statements are set forth in our Annual Report on the Equivalent of Form 10-K for the fiscal year ended March 31, 2008 and our subsequent Quarterly Reports, and include: our high degree of leverage; substantial restrictions in our credit facilities and other debt; declining financial condition of our customers; risks associated with the condition of our suppliers and subsequent availability of product; adequacy of our liquidity to meet our obligations and grow our business; seasonal fluctuations in our business and impact on working capital; our industry's cyclicality and dependence on general economic conditions; inability to achieve profitability given our high degree of leverage and resulting interest expense; affordability of raw materials and components; inability to quickly replace any diminished or lost business due to the length of the sales process; risks related to termination for convenience provisions in certain of our customers' purchase orders and unanticipated cancellation of programs by our customers; risks associated with our parent company being controlled by a Japanese principal stockholder and therefore being subject to the regulatory environment for publicly traded Japanese companies; costs could potentially exceed estimates used in pricing our products; our employee benefit obligations may negatively impact future liquidity; risks related to international sales; inability to protect our intellectual property rights; environmental compliance obligations and liabilities; inability to meet obligations for any product liability and warranty claims; unanticipated labor stoppages at our facilities or those of our customers; general economic conditions in the market sector in which we operate, including continued volume deterioration of our top three customers, changes in interest rates or foreign currency exchanges; impact of the global financial crisis on our business and liquidity; and potential consolidation, loss or insolvency of our customers. We do not intend or assume any obligation to update any of these forward-looking statements.

SOURCE Metaldyne Corporation