EXHIBIT 99.1
DATE: October 30, 2006
U.S. CONTACT EUROPEAN CONTACT
Robert Mead/Christina Stenson Michaela Hopkins
Brunswick Group Brunswick Group
+1-212-333-3810 +44 20 7404 5959
DURA@brunswickgroup.com
FOR IMMEDIATE RELEASE
DURA AUTOMOTIVE'S U.S. AND CANADIAN OPERATIONS FILE
FOR CHAPTER 11 REORGANIZATION
Normal Business Operations Continue
Approximately $300 Million Debtor-in-Possession Financing Commitment
Provides Working Capital
Only DURA's U.S. and Canadian Operations Involved in Court Proceedings
ROCHESTER HILLS, Mich., October 30, 2006 - DURA Automotive Systems, Inc.
(Nasdaq: DRRA), announced today that the company and its U.S. and Canadian
subsidiaries have filed for protection under Chapter 11 of the U.S. Bankruptcy
Code with the U.S. Bankruptcy Court for the District of Delaware. DURA's
European and other operations outside of the U.S. and Canada, accounting for
approximately 51% of DURA's revenue, are not part of the filing.
DURA's decision to pursue a reorganization under Chapter 11 came after
evaluating all options to restructure its balance sheet to reduce the company's
indebtedness and interest expense. DURA elected to pursue a restructuring under
court protection as it will facilitate both a financial restructuring and DURA's
ongoing operational restructuring, the successful implementation of which will
help DURA overcome current financial and industry pressures and position the
company for long-term success.
As part of the filing, DURA has arranged for approximately $300 million in
Debtor-in-Possession (DIP) financing from Goldman Sachs, GE Capital and
Barclays, which will be used by DURA to fund normal business operations and
continue its operational restructuring program initiated in February 2006. The
company has requested, and expects to receive, permission from the Court to pay
employee salaries, wages and benefits. DURA has also asked for authority to pay
certain critical pre-petition vendor claims and will continue to pay its
post-petition obligations in the ordinary course of business. DURA said the
steps it is taking will help ensure continuity of supply to customers.
"With industry conditions tightening further, we concluded that our capital
structure is no longer appropriate," said Larry Denton, chairman and chief
executive officer of DURA Automotive Systems. "The Chapter 11 process will
enable us to work with our creditors on a plan that will reduce our debt burden
and align the business to meet the challenges of tomorrow's automotive
marketplace."
"The entire North American automotive supply industry is at an extremely
difficult juncture," continued Denton. "Pursuing a financial reorganization
under court protections is the prudent course of action and positioning us for
long-term sustainability. This is in the best interest of our employees,
customers, vendors and other business partners."
DURA said the accelerating deterioration of the North American automotive
industry, in particular, further production cuts by the major U.S. OEMs and the
escalating cost of raw materials, adversely affected DURA's cash position prior
to the filing. The DIP financing will improve DURA's liquidity, providing the
company with sufficient working capital to continue normal operations and fund
its turnaround.
In February 2006, DURA initiated an operational restructuring program, focused
on improving quality, lowering production costs, increasing EBITDA and
rightsizing the business to account for capacity reductions. The operational
restructuring program is generating improvements today and will continue to
generate additional improvements throughout the bankruptcy process.
"Once our operational and financial programs are complete, we believe that DURA
will have improved its competitive position in the automotive supply market,
combining best-in-class quality with best-in-cost production through our global
lean-manufacturing footprint," said Denton. "DURA plans to continue to serve
customers with innovative, competitively priced products that meet the highest
standards of quality today and into the future."
ABOUT DURA AUTOMOTIVE SYSTEMS, INC.
DURA Automotive Systems, Inc., is a leading independent designer and
manufacturer of driver control systems, seating control systems, glass systems,
engineered assemblies, structural door modules and exterior trim systems for the
global automotive industry. The company is also a leading supplier of similar
products to the recreation vehicle (RV) and specialty vehicle industries. DURA
sells its automotive products to every North American, Japanese and European
original equipment manufacturer (OEM) and many leading Tier 1 automotive
suppliers. DURA is headquartered in Rochester Hills, Mich. Information about
DURA and its products is available on the Internet at www.DURAauto.com.
Forward-looking Statements
This press release, as well as other statements made by DURA may contain
forward-looking statements within the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, that reflect, when made, the company's
current views with respect to current events and financial performance. Such
forward-looking statements are and will be, as the case may be, subject to many
risks, uncertainties and factors relating to the company's operations and
business environment which may cause the actual results of the company to be
materially different from any future results, express or implied, by such
forward-looking statements. Factors that could cause actual results to differ
materially from these forward-looking statements include, but are not limited
to, the following: (i) the ability of the company to continue as a going
concern; (ii) the ability of the company to operate pursuant to the terms of the
debtor-in-
possession ("DIP") financing facility; (iii) the company's ability to obtain
court approval with respect to motions in the chapter 11 proceeding prosecuted
by it from time to time; (iv) the ability of the company to develop, prosecute,
confirm and consummate one or more plans of reorganization with respect to the
Chapter 11 cases; (iv) risks associated with third parties seeking and obtaining
court approval to terminate or shorten the exclusivity period for the company to
propose and confirm one or more plans of reorganization, for the appointment of
a chapter 11 trustee or to convert the cases to chapter 7 cases; (v) the ability
of the company to obtain and maintain normal terms with vendors and service
providers; (vi) the company's ability to maintain contracts that are critical to
its operations; (vii) the potential adverse impact of the Chapter 11 cases on
the company's liquidity or results of operations; (viii) the ability of the
company to execute its business plans, and strategy, including the operational
restructuring initially announced in February 2006, and to do so in a timely
fashion; (ix) the ability of the company to attract, motivate and/or retain key
executives and associates; (x) the ability of the company to avoid or continue
to operate during a strike, or partial work stoppage or slow down by any of its
unionized employees; (x) general economic or business conditions affecting the
automotive industry (which is dependent on consumer spending), either nationally
or regionally, being less favorable than expected; and (xi) increased
competition in the automotive components supply market. Other risk factors are
listed from time to time in the company's United States Securities and Exchange
Commission reports, including, but not limited to the Annual Report on Form 10-K
for the year ended December 31, 2005. DURA disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a result of new
information, future events and/or otherwise.
Similarly, these and other factors, including the terms of any reorganization
plan ultimately confirmed, can affect the value of the company's various
pre-petition liabilities, common stock and/or other equity securities.
Additionally, no assurance can be given as to what values, if any, will be
ascribed in the bankruptcy proceedings to each of these constituencies. A plan
of reorganization could result in holders of DURA's common stock receiving no
distribution on account of their interest and cancellation of their interests.
Under certain conditions specified in the Bankruptcy Code, a plan of
reorganization may be confirmed notwithstanding its rejection by an impaired
class of creditors or equity holders and notwithstanding the fact that equity
holders do not receive or retain property on account of their equity interests
under the plan. In light of the foregoing, the company considers the value of
the common stock to be highly speculative and cautions equity holders that the
stock may ultimately be determined to have no value. Accordingly, the company
urges that appropriate caution be exercised with respect to existing and future
investments in DURA's common stock or other equity interests or any claims
relating to pre-petition liabilities.