First Brands (Fram) bankruptcy
- Thread starter Alien
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Have to review the details of the financing see what it says, didn't have the time, ok so I read slow.. Maybe someone with more finance/legal knowledge can jump in.. But on the surface this is really like putting lipstick on a pig. Can you imagine the levels of GOING CHEAPER they will do just to make some sort of profit? Reminds me of the old saying "Rearranging the deck chairs on the Titanic"!!
Folks.. get the popcorn ready, this is getting crazy
According to Wikipedia: "DIP financing may be used to keep a business operating until it can be sold as a going concern, if this is likely to provide a greater return to creditors than the firm's closure and a liquidation of assets."
Is there an estimate if they piecemeal the brands off to the highest bidders?
Note that DIP financing is senior to all other corporate debt and equity. The focus of the bankrupt company will be to get the DIP fully repaid plus as much of the other debt as possible.
Debt obligations of $9.295 billion before filing for bankruptcy. Crazy.
"According to the first day declaration in the case filed by Charles Moore, a managing director at Alvarez & Marsal North America and the company’s chief restructuring officer, the company’s prepetition debt obligations total about $9.295 billion, including ABL loans and letters of credit in the amount of about $226.9 million, ABL supply chain financing/cash management obligations of about $369.4 million, and term loan obligations of about $5.54 billion."
I have since read several other articles around the First Brand bankruptcy in general, and how Wall Street was pretty shocked in how fast this happened. Usually the rumor mill starts long before.. Jefferies was trying to peddle an additional I think $6B loan package for them only a couple months ago saying they were "stable". There is now concern across the entire automotive industry - ie everyone else should expect it be harder and more expensive to borrow money.
There is also lots of whispers on fraud. If thats the case it makes things much more complex.
The current lenders have put up as much as $4B in DIP financing, which the judge has approved their use of $500M immediately. DIP financing is usually put up by the original lenders, in hopes they can stabilize the company and get a better return on their original but now bad loans. If they simply let the company get sold off in distress they likely wouldn't get much if anything back. If they can stabilize it - its possible they can restructure, maybe sell off some pieces, and continue to get paid at least something on their outstanding loans.
There is also lots of whispers on fraud. If thats the case it makes things much more complex.
The current lenders have put up as much as $4B in DIP financing, which the judge has approved their use of $500M immediately. DIP financing is usually put up by the original lenders, in hopes they can stabilize the company and get a better return on their original but now bad loans. If they simply let the company get sold off in distress they likely wouldn't get much if anything back. If they can stabilize it - its possible they can restructure, maybe sell off some pieces, and continue to get paid at least something on their outstanding loans.
Why, you buying?
Probably a low bid because that much debt, probably pieces won't even get there. But I figured if anyone would tally it up, it would be you.Why, you buying?
LOL I can drive you around the Southeast and point out all of the empty tier supply parts plants that are abandoned. Some from closed companies, some companies still exist just not using those facilities or making those parts.
The "brand" is the only thing of value.
Exactly.
I wonder what that worth is!GON
$175 Site Donor 2026
I am wondering if people and getting "wise" to the licensing of a brand.Exactly.
Does Craftsman, Die Hard, GE, DuPont, etc-- really provide confidence today in a product? Decades ago, a Craftsman, GE, DuPont product meant a lot. Today, it is more often than not just some licensing deal. In SE Asia, I purchased a Westinghouse labeled bathroom scale. There were lots of scales for sale, but bought Westinghouse in hopes of a bit better quality. The Westinghouse scale just total garbage. Different weight results every time one steps on the scale. I am sure some Chinese manufacturer bought the rights to the Westinghouse brand for retail sales.
I think it is a very unreasonable expectation on a MACRO basis to assume a popular name brand will return to "glory days" of innovation and quality once the name brand goes into bankruptcy.
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Goes to show there isn't much of this country left other than financial power and the clowns that possess them. All of this hyper financialization at the expense of workers and industries to benefit a few at the top of the leadership that gets their golden parachute when it all comes falling down.
Once a zombie, always a zombie.
Once a zombie, always a zombie.
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They copy everything in SE Asia. If there is such a thing as a Westinghouse company that makes scales and retail store there, you should have gotten it there. You were tricked. I am now much more wary. You probably got a reject that they hoped the Westinghouse name would make the sale to get rid of it.
Craftsman was bought by Black and Decker and is making some good tools. They still have a good guarantee which requires a large company to absorb the returns.
@GON is right. For instance the GE small appliance name is owned by WalMart now. They slap that name on stuff they have made for Walmart. I know there are others, it's easy to see, grab a box of any small appliance with a name brand on it and the address on the back will be Walmart.
This buying the IP (intellectual property) which is the name, and slapping it on something else has been happening for quite awhile. Even Advance Auto bought the DieHard battery brand from Sears.
This buying the IP (intellectual property) which is the name, and slapping it on something else has been happening for quite awhile. Even Advance Auto bought the DieHard battery brand from Sears.
The ‘Canadian filter market’, if you can call it that, is in HUGE trouble if Fram ceases to exist - I’d say 80% of the filters sold and used up here are Frams. Most people buy the from CT and WM, and that is most of what they stock! No-one can replace that volume that quickly.
CT ‘Motomaster’ filters are Frams, and about 2 weeks ago they all went discontinued and are disappearing from the shelves. Frams still come in, but the shelves are a lot ‘thinner’ than before.
We may see a ‘collapse’ of the consumer market for filters up here, with limited supply, and prices going into the stratosphere.
CT ‘Motomaster’ filters are Frams, and about 2 weeks ago they all went discontinued and are disappearing from the shelves. Frams still come in, but the shelves are a lot ‘thinner’ than before.
We may see a ‘collapse’ of the consumer market for filters up here, with limited supply, and prices going into the stratosphere.
Problem is, they've destroyed a few of the brands....I only follow the brake side of things, but Centric is all but gone now. IBI / Carlson is sort of done....They private label for O'reilly brakebest line....and inventory is slipping, so they're likely not filling orders.
Their only remaining customers are the ones who beat them down on price like the big name parts store chains and the OEMs (They used to supply a lot of the second line parts like Motorcraft and ACDelco to Ford and GM, as well as Mazda and probably a bunch more), and the internet like Rock Auto / Amazon....and I know they were selling direct on Walmart.com.
They killed all the brands....it isn't worth anything to anyone IMO, at least compared to 6 years ago
I’m afraid you are correct
Patman
Staff member
Canadian Tire will probably add the Pro Series OE+ filters that they already sell at PartSource to fill up more space. Maybe they will add Purolator as well.
Someone will fill the demand. Most of the good filters are made in China or Vietnam now anyway, I am sure they have capacity. Or maybe the Polish Hengst ones.
Opportunity knocks. Order a container full from China. East Coast port transit is about 30 days or so.
