UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): MARCH 15, 2007
TECUMSEH PRODUCTS COMPANY
(Exact name of registrant as specified in its charter)
MICHIGAN 0-452 38-1093240
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
100 EAST PATTERSON STREET
TECUMSEH, MICHIGAN 49286
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (517) 423-8411
(NOT APPLICABLE)
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
ITEM 2.04 TRIGGERING EVENTS THAT ACCELERATE OR INCREASE A DIRECT FINANCIAL
OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT.
As previously reported, our Brazilian engine manufacturing subsidiary, TMT
Motoco, has its own financing arrangements with Brazilian banks pursuant to
which it is required to pay principal installments of various amounts through
2009. Historically, TMT Motoco has experienced negative cash flows from
operations, indicating that it may not have sufficient liquidity to make all
required debt repayments as currently scheduled. On November 21, 2006, TMT
Motoco lenders representing more than 60% of the outstanding amounts borrowed
executed an out-of-court restructuring agreement whereby scheduled maturities
were deferred for eighteen months, with subsequent amortization over the
following eighteen months.
Two banks representing less than 40% of the outstanding amounts borrowed
did not participate in the out-of-court restructuring agreement, so TMT Motoco
initiated a court proceeding under a Brazilian statute to impose the terms of
the restructuring on those two banks. Meanwhile, TMT Motoco continued
negotiations with one of the two banks, and that bank rolled over principal
installments that otherwise would have come due. TMT Motoco ceased making
further payments to the other dissenting bank effective November 15, 2006, and
that bank started legal action to collect its debt. The Brazilian court stayed
the bank's collection activities while the court considered TMT Motoco's action
to impose the terms of the restructuring on the dissenting banks.
On March 15, 2007, the Brazilian court ruled against TMT Motoco, lifted the
stay on the bank's collection proceedings, and implemented sweep procedures for
TMT Motoco's bank accounts. These actions had the effect of accelerating TMT
Motoco's debt to that bank, which totals approximately $18 million, making it
all now due and payable and enabling the bank to pursue its remedies for
collection under Brazilian law. TMT Motoco has initiated an appeal of the
Brazilian court's decision and meanwhile has placed that plant on vacation
furlough. As a result of these developments, TMT Motoco may be forced to file
for protection under Brazilian bankruptcy law.
The events described above may enable our domestic lenders to accelerate
repayment of their debts unless they agree to waive the defaults or enter into
curative amendments to our first and second lien credit agreements. We are
engaged in discussions with them and have received no indication that they
intend to accelerate or that they will not agree to any requested consents,
waivers, or amendments, but there can be no assurance that we will reach an
agreement or as to what the terms of any such agreement may be.
Our management is assessing what impact the developments at TMT Motoco may
have on our other businesses, including our Brazilian compressor manufacturing
subsidiary, Tecumseh do Brasil Ltda. Management is working to protect these
other businesses from any adverse effects of the events at TMT Motoco to the
greatest extent possible.
ITEM 7.01 REGULATION FD DISCLOSURE.
On March 21, 2007, we issued a press release about the events described in
Item 2.04. We are furnishing a copy of the press release as an exhibit to this
report.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibit is furnished with this report:
Exhibit No. Description
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99.1 Press Release dated March 21, 2007
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TECUMSEH PRODUCTS COMPANY
Date: March 21, 2007 By /S/ James S. Nicholson
------------------------------------
James S. Nicholson
Vice President, Treasurer and Chief
Financial Officer
NOTE: The information in Item 7.01 of this report and the related exhibit
is not to be deemed "filed" for purposes of Section 18 of the Exchange Act or
otherwise subject to the liabilities of that section unless the registrant
specifically incorporates it by reference into a filing under the Securities Act
or the Exchange Act.
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release dated March 21, 2007