Federal-Mogul emerges from Chapter 11
Federal-Mogul Corp. (OTC: FDMLQ) reported that it emerged from Chapter 11 on Dec. 27. The auto parts manufacturer issued 49.9 million shares of its Class A common stock and 50.1 million shares of its Class B common stock.
“We begin 2008 with confidence in our future and we are well positioned with our global strategy for sustainable profitable growth,” CEO José Maria Alapont said in a statement. “We wish to thank our customers, employees, stakeholders and the communities in which we do business for their loyalty and support. We remain committed to deliver value to all of them.”
The Southfield, Mich.-based company reported that it entered into a $3.5 billion exit facility.
“We have continued during the restructuring process to grow our business globally and have strengthened our financial performance,” Alapont said. “The worldwide Federal-Mogul team is fully dedicated to exceed customer and market expectations by creating value through innovative technology, leading products and service excellence at competitive cost. We are pleased to emerge as a world-class, diversified global supplier.”
The company was forced into bankruptcy six years ago due to asbestos-related lawsuits. Federal-Mogul has about 45,000 employees worldwide and makes a wide range of automotive products, including windshield wipers, Champion spark plugs and pistons.
In 2001, hundreds of thousands of lawsuits seeking millions in damages were filed against the firm. Federal-Mogul bought several companies in 1998 that were facing asbestos lawsuits. The companies Federal-Mogul acquired were businesses that used asbestos, which causes lung cancer and respiratory illnesses, to make brakes and gaskets.
Billionaire investor Carl Icahn, who owns a quarter of Federal-Mogul, is expected to have options to buy more than three-quarters of the company’s stock.
In morning trading, FDMLQ shares are flat at $0.45. Over the last 52 weeks, shares have ranged from $0.40 to $1.39.
