Marelli Holdings, a global automotive technology firm headquartered in Japan and backed by KKR & Co., has voluntarily initiated Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the District of Delaware. The move allows the company to maintain operations while gaining relief from financial disputes with hedge funds, debt lenders, and its private equity owners.
The decision is focused on restructuring Marelli’s long-term debt. Around 80% of its lenders have backed the filing by signing a restructuring support agreement to reduce the company’s debt burden and strengthen its financial position.
Marelli President and CEO David Slump emphasized the company’s proactive efforts to strengthen its financial stability to ensure long-term value for its customers, partners, and employees. While acknowledging recent progress and profitability, he noted that industry-wide challenges have resulted in a working capital gap that demands urgent attention.
Marelli has secured $1.1 billion in debtor-in-possession financing from its lenders to support its restructuring. Once approved by the court, this financing, along with the company’s revenue, will provide Marelli with the necessary funds to maintain stable operations throughout the bankruptcy proceedings. Additionally, the restructuring support agreement includes a plan for lenders to take ownership of Marelli once it exits Chapter 11, following a 45-day overbid process.
Marelli has submitted standard motions to support business continuity during its restructuring. These measures ensure that employee wages remain unaffected and that major customer programs continue without disruption. The company anticipates court approval for these motions and remains committed to its stakeholders, including honoring payment obligations to suppliers for goods and services received after the filing.
Marelli expects to operate without disruptions during the Chapter 11 process. Meanwhile, the company is working with suppliers to negotiate terms for outstanding pre-filing obligations.
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