Holley Files Bankruptcy
02-12-2008, 11:58 AM
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Holley Files Bankruptcy http://www.bloomberg.com/apps/news?p...ZqqfE&refer=us
Holley, Specialty Car-Parts Maker, Files Bankruptcy (Update2)
By Steven Church
Feb. 11 (Bloomberg) -- Holley Performance Products Inc., a century-old maker of specialty parts for stock-car and drag- racing, filed for bankruptcy, faulting a late 1990s expansion for saddling the company with too much debt.
Closely held Holley would be taken over by noteholders owed as much as $145.8 million, according to an outline of a reorganization plan filed today in U.S. Bankruptcy Court in Wilmington, Delaware. The company, based in Bowling Green, Kentucky, listed debts of $243 million and assets of $106 million as of Jan. 28.
In the years following its expansion, ``Holley did not generate sufficient cash flows to support the debt incurred,'' Chief Financial Officer Thomas W. Tomlinson said in an affidavit.
Holley and four of its affiliates filed for bankruptcy protection about two years after the company renegotiated the terms on part of the 12.5 percent notes that were due last year. Holley's majority shareholder, funds managed by Kohlberg & Co., quit providing the company the cash it needed to make interest payments, according to court papers.
The reorganization will cut Holley's debt by about $100 million, Tomlinson said in a telephone interview today.
Holley has about 390 employees in Kentucky, California and Mississippi who make carburetor and other fuel and air-systems parts with brand names including Hooker, FlowTech and Nitrous Oxide Systems.
Nascar Sponsor
``Employees will not be affected by the bankruptcy, and the company will continue operations as normal,'' Tomlinson said.
Holley's customers include Ford Racing and GM Performance Parts. The company is a sponsor of the National Hot Rod Association and has a program that supports the National Association for Stock Car Auto Racing, (Nascar), according to court documents.
The company was founded in 1903 by brothers George and Earl Holley, who designed a carburetor for the Ford Model T called the Iron Pot. Later, Holley built engine parts for planes during World War II, according to the company's Web site.
Under a deal negotiated with 70 percent of the company's second-lien noteholders, Holley would pay its general unsecured creditors, such as trade vendors, in full and give almost all its equity to the noteholders, according to a description of the reorganization plan, called a disclosure statement, filed today.
Noteholders would get about 45.8 percent of what they're owed under the proposal, which requires a judge's approval.
The case is: In re Holley Performance Products Inc., 08-10256, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporters on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net ; Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net .
Last Updated: February 11, 2008 17:16 EST (Update2)
By Steven Church
Feb. 11 (Bloomberg) -- Holley Performance Products Inc., a century-old maker of specialty parts for stock-car and drag- racing, filed for bankruptcy, faulting a late 1990s expansion for saddling the company with too much debt.
Closely held Holley would be taken over by noteholders owed as much as $145.8 million, according to an outline of a reorganization plan filed today in U.S. Bankruptcy Court in Wilmington, Delaware. The company, based in Bowling Green, Kentucky, listed debts of $243 million and assets of $106 million as of Jan. 28.
In the years following its expansion, ``Holley did not generate sufficient cash flows to support the debt incurred,'' Chief Financial Officer Thomas W. Tomlinson said in an affidavit.
Holley and four of its affiliates filed for bankruptcy protection about two years after the company renegotiated the terms on part of the 12.5 percent notes that were due last year. Holley's majority shareholder, funds managed by Kohlberg & Co., quit providing the company the cash it needed to make interest payments, according to court papers.
The reorganization will cut Holley's debt by about $100 million, Tomlinson said in a telephone interview today.
Holley has about 390 employees in Kentucky, California and Mississippi who make carburetor and other fuel and air-systems parts with brand names including Hooker, FlowTech and Nitrous Oxide Systems.
Nascar Sponsor
``Employees will not be affected by the bankruptcy, and the company will continue operations as normal,'' Tomlinson said.
Holley's customers include Ford Racing and GM Performance Parts. The company is a sponsor of the National Hot Rod Association and has a program that supports the National Association for Stock Car Auto Racing, (Nascar), according to court documents.
The company was founded in 1903 by brothers George and Earl Holley, who designed a carburetor for the Ford Model T called the Iron Pot. Later, Holley built engine parts for planes during World War II, according to the company's Web site.
Under a deal negotiated with 70 percent of the company's second-lien noteholders, Holley would pay its general unsecured creditors, such as trade vendors, in full and give almost all its equity to the noteholders, according to a description of the reorganization plan, called a disclosure statement, filed today.
Noteholders would get about 45.8 percent of what they're owed under the proposal, which requires a judge's approval.
The case is: In re Holley Performance Products Inc., 08-10256, U.S. Bankruptcy Court, District of Delaware (Wilmington).
To contact the reporters on this story: Steven Church in Wilmington, Delaware, at schurch3@bloomberg.net ; Michael Bathon in Wilmington, Delaware, at mbathon@bloomberg.net .
Last Updated: February 11, 2008 17:16 EST (Update2)
02-12-2008, 01:31 PM
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It looks like they are issuing stock to their debtors instead of paying back the loans. I went looking for Lunati stuff the other day and was surprised to see they were no longer a "Holley Company".
Last edited by NWDragRacer; 02-12-2008 at 01:33 PM. Reason: added Lunati stuff
02-12-2008, 02:29 PM
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Wow, hadn't been paying attention to this, had no idea. Grew up with the Holley name and associate names, Don you must remember the innuendo with Hooker Headers? 
Hope we still see the name around for another century.
Hope we still see the name around for another century.
02-13-2008, 09:25 AM
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Hi, My name is Jay McFarland and I am a Sr.Product Manager at Holley. I would like to shed a little light on the subject. The “bankruptcy” word sounds harsh, but Holley is fine. Please read the official press release below and then our further comments below that.
BOWLING GREEN, KENTUCKY, February 11, 2008 - Holley Performance Products Inc. (the “Company”) announced today that its Owner/Investors have overwhelmingly approved a plan to dramatically enhance the Company’s capital structure by converting a majority of the Company’s debt into equity.
Thomas W. Tomlinson, the Company’s Chief Financial Officer, said today that “This is a prudent financial move on the part of our Owner/Investors – it tremendously strengthens our Company’s financial position and provides substantial flexibility to invest in our future. This investment will allow the Company to realize its full growth potential and will maximize the value we can return to our investors. The actual conversion of debt into equity will be accomplished through a “Prepackaged” bankruptcy filing that will cancel-out the old capital structure and formally establish the new one. Customers, suppliers, and employees will not be affected.” Mr. Tomlinson emphasized that, “It will be “business-as-usual” at Holley throughout the restructuring process which we expect to be completed in as few as 45 days.”
James D. Wiggins, the Company’s Chief Executive Officer, went on to say that “We are very pleased with the transformation that has taken place here at Holley over the last several years. Today Holley is a lean and focused enterprise with strong customer relationships, significant technological capabilities, and diversified revenue sources. We have established a good track record of profitability and growth in enterprise value. This restructuring represents the culmination of tremendous effort on the part of the team at Holley and we are excited to share news of this successful program with you.”
Holley is a leader in the performance engine market, and is used throughout the world in racing, street, marine, and powersports. Holley’s family of companies includes the leading brands in the performance market including: Holley, Weiand, Hooker, FlowTech, Earl’s, and NOS.
So, what does this mean to you, the racer/enthusiast/consumer? It means that Holley will be a much healthier company and able to bring you better products, technology and support. This can now be done because we won’t be under the same financial constraints of the last few years.
Essentially, what has happened is that the original investment group will transfer ownership to the second tier of investors who were a minority owner. As a result, the debt we now owe is significantly less and puts us in a better position for the future.
This was intentionally structured this way so our vendors, employees and consumers wouldn’t be impaired in any way. It will be business as usual:
• Product will be available as always with no interruption in supply
• Race contingency and event sponsorship programs will continue as planned
• Technical service support via phone, e-mail and at track is unchanged
• All product warranty systems are continuing as normal
• New product development is ongoing and we expect to release several exciting new programs throughout the year and at SEMA/PRI.
I wanted to make sure everyone understood what this means and that it still means business as usual for Holley. Let me know if you have any questions.
Thanks ,
Jay
BOWLING GREEN, KENTUCKY, February 11, 2008 - Holley Performance Products Inc. (the “Company”) announced today that its Owner/Investors have overwhelmingly approved a plan to dramatically enhance the Company’s capital structure by converting a majority of the Company’s debt into equity.
Thomas W. Tomlinson, the Company’s Chief Financial Officer, said today that “This is a prudent financial move on the part of our Owner/Investors – it tremendously strengthens our Company’s financial position and provides substantial flexibility to invest in our future. This investment will allow the Company to realize its full growth potential and will maximize the value we can return to our investors. The actual conversion of debt into equity will be accomplished through a “Prepackaged” bankruptcy filing that will cancel-out the old capital structure and formally establish the new one. Customers, suppliers, and employees will not be affected.” Mr. Tomlinson emphasized that, “It will be “business-as-usual” at Holley throughout the restructuring process which we expect to be completed in as few as 45 days.”
James D. Wiggins, the Company’s Chief Executive Officer, went on to say that “We are very pleased with the transformation that has taken place here at Holley over the last several years. Today Holley is a lean and focused enterprise with strong customer relationships, significant technological capabilities, and diversified revenue sources. We have established a good track record of profitability and growth in enterprise value. This restructuring represents the culmination of tremendous effort on the part of the team at Holley and we are excited to share news of this successful program with you.”
Holley is a leader in the performance engine market, and is used throughout the world in racing, street, marine, and powersports. Holley’s family of companies includes the leading brands in the performance market including: Holley, Weiand, Hooker, FlowTech, Earl’s, and NOS.
So, what does this mean to you, the racer/enthusiast/consumer? It means that Holley will be a much healthier company and able to bring you better products, technology and support. This can now be done because we won’t be under the same financial constraints of the last few years.
Essentially, what has happened is that the original investment group will transfer ownership to the second tier of investors who were a minority owner. As a result, the debt we now owe is significantly less and puts us in a better position for the future.
This was intentionally structured this way so our vendors, employees and consumers wouldn’t be impaired in any way. It will be business as usual:
• Product will be available as always with no interruption in supply
• Race contingency and event sponsorship programs will continue as planned
• Technical service support via phone, e-mail and at track is unchanged
• All product warranty systems are continuing as normal
• New product development is ongoing and we expect to release several exciting new programs throughout the year and at SEMA/PRI.
I wanted to make sure everyone understood what this means and that it still means business as usual for Holley. Let me know if you have any questions.
Thanks ,
Jay
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02-13-2008, 10:13 PM
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Thanks Jay for stopping by our little corner of the internet and sheding some light on the situation. It's good to hear that we can still depend on the Holley that we've known for so many years.
Can you give us some insight on which companies were divested? Like Lunati and such?
Thanks!
Can you give us some insight on which companies were divested? Like Lunati and such?
Thanks!
02-14-2008, 08:50 AM
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Thanks Jay for stopping by our little corner of the internet and sheding some light on the situation. It's good to hear that we can still depend on the Holley that we've known for so many years.
Can you give us some insight on which companies were divested? Like Lunati and such?
Thanks!
Can you give us some insight on which companies were divested? Like Lunati and such?
Thanks!
Thanks, Jay
