Briggs & Stratton Files Chapter 11 to Effect Sale
Gas engine maker Briggs & Stratton submitted for bankruptcy on Monday to effectuate a sale of the enterprise as it faces losses, pending personal debt payments and the coronavirus disaster.
As section of the Chapter eleven filing, private equity company KPS Cash has created a $550 million “stalking horse” provide to purchase all of Briggs & Stratton’s belongings. It will also give $265 million to retain the enterprise functioning throughout the bankruptcy approach.
The filing came soon after Briggs issued a heading-concern warning and employed restructuring advisers in Could to support address its personal debt stress.
“Over the earlier a number of months, we have explored many solutions with our advisers to bolster our fiscal placement and overall flexibility,” CEO Todd Teske said in a news launch. “The problems we have faced throughout the COVID-19 pandemic have created reorganization the challenging but essential and correct route forward to safe our enterprise.”
The coronavirus pandemic experienced added to Briggs’ liquidity challenges as the enterprise shuttered vegetation and its consumers diminished orders. Its income fell by 18% to $474 million in the third quarter ended March 29 and it was expecting a $157 million income strike from the pandemic for the fourth quarter.
Briggs, which was launched in 1908 by inventor Stephen Briggs and investor Harold Stratton, tends to make engines that are used principally by the garden and yard machines business for garden mowers, yard tillers, and snow throwers. Its items are sold in more than a hundred nations around the world.
According to the Milwaukee Journal Sentinel, the enterprise was “losing funds and burdened by substantial debts when the economic downturn brought about by the coronavirus pandemic strike.”
As of March 31, Briggs experienced shorter-phrase personal debt of $597.five million and long-phrase personal debt of $7 million. The shorter-phrase personal debt consists of $195.five million in bonds due in December that experienced to be refinanced by Sept. 15 or the enterprise would be in violation of its mortgage agreements with a consortium of banking companies, enabling them to demand from customers fast reimbursement.
KPS Capital’s bid sets a minimal price for Briggs’ belongings. “KPS intends to expand the new Briggs & Stratton aggressively by means of strategic acquisitions,” Co-Handling Companion Michael Psaros said.