Update on restructuring
Azure Dynamics reports progress in restructuring
20 April 2012
Azure Dynamics, a developer and producer of hybrid-electric and electric components and powertrain systems for commercial vehicles, has provided an update on the status of its restructuring. On 26 March, the company filed for and obtained protection from its creditors under the Companies’ Creditors Arrangement Act (Canada) (CCAA). (Earlier post.) The Supreme Court of British Columbia granted the initial order; Ernst & Young Inc. (EY) was appointed Monitor of AZD during the CCAA proceedings.
EY as Monitor sought relief from the US Bankruptcy court pursuant to Chapter 15. The US Bankruptcy court granted a temporary restraining order on 27 March and a preliminary injunction order on 9 April pending a full recognition hearing on 3 May 2012. The CCAA and Chapter 15 proceedings provide AZD the opportunity to restructure its business and financial affairs.
While this process does not mean that Azure is bankrupt or that it will cease operations. The CCAA filing has allowed Azure’s management team to implement significant restructuring measures and seek out debtor-in-possession (DIP) financing.
On 13 April, the CDA Court granted an order approving a DIP financing facility which will provide AZD up to $4,000,000 in funding during these proceedings to support the company’s mission to move forward.
Azure Dynamics (AZD) has been able to re-establish its vehicle warranty effective immediately. As a result of capital constraints and the restructuring process it had temporarily suspended warranty coverage in order to get the company back into a position that would allow it to handle claims. Azure Dynamics will now cover all warranty claims on vehicles where work was performed from 27 March forward.
The warranty claims will be honored on all AZD products in North America and Europe. Any outstanding warranty claims where repairs were performed prior to 26 March will remain part of the CCAA and will be dealt with as part of the proceedings.