Meridian Restructuring Completed in 11 Days

Debtors refinance, take 100% of equity in new organization

The pre-packaged reorganization of magnesium automotive diecaster Meridian Technologies Inc. is complete. After just 11 days in creditor protection, the Ontario company announced that its “plan of arrangement” has been implemented and the new organization, Meridian Lightweight Technologies, has been established under the Companies’ Creditors Arrangement Act.

All of Meridan’s secured lenders and major customers supported the reorganization. The lenders, led by GE Commercial Finance, have provided C$55 million ($54.2 million) of new financing, including a C$30-million ($29.6-million) revolving credit facility and a C$25-million ($24.7-million) term loan.

Along with the new financing, Meridan’s secured lenders exchanged a significant but undefined portion of existing debt for all of the equity of the new company. The former organization had been a holding of Swiss investor Jostein Eikeland, who also controlled a stake in Swedish magnesium diecaster Tonsberg Magnesium Group Intl. That company reportedly is in creditor protection also, amid a global upswing in primary magnesium prices keyed to high demand in China.

Meridian Technologies declared its intent to reorganize on June 13, with chief restructuring officer Robert M. Caruso citing “a cloud of uncertainty that has created doubts about our long-term viability.” With the reorganization complete and Caruso now the CEO, he said the company is “well-positioned to compete under current market conditions and achieve long-term growth and sustainable profitability.”

Caruso added that the new Meridian boasts a “significantly deleveraged balance sheet and sufficient liquidity to support its operations and execute its strategic plan to return to profitability.

Meridian describes itself as the world’s largest supplier of lightweight magnesium diecastings. It has seven manufacturing plants, two in Strathroy, ON, and one each in Eaton Rapids, MI; Verres, Italy; Sutton-in-Ashfield, England; and Shanghai and Chongqing , China. Its products include automotive instrument panels, cross beams, transfer cases, and steering column supports

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