According to Intermet Corp., the U.S. bankruptcy court overseeing its bankruptcy reorganization has denied the company’s motion for an equity investment from two private fund groups. R2 Investments L.D.C. and Stanfield Capital Partners L.L.C. had proposed a $75-million investment that was intended to cover the fees and administrative and debtor-in-possession costs of the reorganization. The investors were due to receive 7.5 million shares of new Intermet stock in exchange.
The court will allow Intermet to refile the motion later. A hearing on Intermet’s disclosure statement is still scheduled for August 9, and the company stated it is working on a reorganization plan that will allow it to exit Chapter 11 bankruptcy protection.
Intermet filed for Chapter 11 bankruptcy in September 2004, citing poor demand for its cast-metal products and unstable raw materials costs for its insolvency.