Released on June 30, 2009

Ferrous metalcasting giant Grede Foundries Inc., Milwaukee, announced it has filed a petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code and is seeking a long-term owner for the company.

According to a press release issued by Grede, the company has a potential buyer willing to finance it until a public sale where other suitors can submit bids. Wayzata Investment Partners LLC, Wayzata, Minn., an investment adviser and manager of private investment funds, has offered to provide a $45 million temporary loan facility to allow time for sale under the supervision of the Bankruptcy Court.

According to Grede Board Chairman Richard Koenings, the bankruptcy filing was driven by the effects of the current economic downturn on Grede’s customers, particularly those in the automotive and construction industries. Koenings said the reorganization effort and asset sale will position the company for a turnaround.

“This move gives us the time to restructure while we continue to do business and operate our plants,” he said. “Grede will continue to buy goods and services from its vendors, support its workforce and provide its customers with the same quality products and service they’ve come to expect from us. Our goal is to preserve and strengthen our business so that we can compete successfully in the future.”

According to the Grede press release, sales of businesses in bankruptcy proceedings often are structured so that one company makes the initial bid for another company’s assets.  Under rules approved by the court, higher offers from third parties then can be submitted as competing bids. The arrangement with the initial bidder helps ensure that the purchased company receives the best value for its assets and allows for offers that are best for the creditors while preserving the business operations.

Grede said it has already received inquiries from other parties that are interested in its operations, which include eight metalcasting facilities in Milwaukee, Reedsburg, Wis., Vassar, Mich., St. Cloud, Minn., Iron Mountain/Kingsford, Mich., New Castle, Ind., Wichita, Kan., and Greenwood, S.C.