Global Fastener News

2004 FIN – Bahadrian: Ivaco Sale Benefits Stakeholders

November 17
00:00 2012

September 1, 2004 FIN – The sale of Ivaco Inc. to Heico Companies LLC “maximizes benefits to customers, suppliers, creditors and employees, Ifastgroupe Inc. general manager Joseph Bahadrian wrote to suppliers.

The sale of the bankrupt Canadian steelmaker includes the Ifastgroupe fastener businesses – Infasco, Galvano, Ingersoll Fasteners and Infasco Nut.
“With respect to Ifastgroupe, we expect a substantial cash distribution for claims made against the company, although the precise amounts are not known yet,” Bahadrian wrote.
On August 19 the Ontario Superior Court of Justice approved the sale for about CAD$375 million (U.S.$285 million). The deal, which will leave shareholders empty handed, was first announced in early August. Ivaco has been restructuring since seeking court protection in September 2003.
“This is another significant step in the path to complete the restructuring of Ivaco,” commented chief restructuring officer Randall Benson. “We are pleased that the Court has endorsed this sale transaction and we look forward to completing the remaining requirements to close as quickly as possible.”
The sale is expected to close during the fourth quarter of 2004. The company warned that it does not expect shareholders to “receive any value for their shares as a result of these transactions. In a letter to customers,” CEO Gordon Silverman said. Ivaco has made “great progress in the last 10 months shedding unprofitable products and operations, improving productivity and focusing our businesses.” Silverman declared Ivaco is “now healthier and more viable.”
Second quarter figures from the Canadian steelmaker support Silverman’s claim. Sales climbed 40% during the quarter, while profit rebounded to nearly CAD $18 million.
“Heico has indicated its intention to continue operations with the current management team, including its direction and philosophy,” Bahadrian wrote to suppliers.
In addition to Bahadrian, fastener executives are: Mortie Chaikelson, Infasco vice president and legal counsel; Robert Ivanier, Infasco vice president for sales and distribution; Tom Perlus, vice president of Marieville operations for Infasco and Sivaco; Charlie Birch, Ingersoll Fasteners general manager; Ed Duchin, Ingersoll sales manager; and John Clifford, Infasco Nut general manager. Heico is a Chicago-based holding company controlled by financier Michael Heisley.
Heisley is best known in Canada as the man who bought the Vancouver Grizzlies in 2000 for about CAD $160 million, then relocated the NBA team to Memphis the next year. . ©2004/2012 Fastener Industry News
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2004 FIN � HEICO to Buy Bankrupt Ivaco
August 10, 2004 FIN – Insolvent Canadian fastener manufacturer and steelmaker Ivaco Inc. will sell its businesses for a total of Canadian $375-million (U.S.$285 million) to Heico Cos. LLC, a Chicago-based holding company. The deal, which reportedly includes fastener operations Infasco, Infasco Nut, Ingersoll Fasteners, Galvano, Vermont Fasteners and IFC Inc, will pay creditors but leave shareholders empty handed. If approved, the sale is expected to close by the end of 2004.
Ivaco has been shopping its fastener businesses to other companies since October 2003, a month after it filed for bankruptcy protection.
Court filings indicate the company had CAD$262 million in debt and CAD$178 million in unfunded pension liabilities when it filed for bankruptcy.
Heico will assume certain unfinalized liabilities, which could reduce the amount of cash paid to creditors by up to CAD$100 million.
Ivaco operations include Canada’s largest rod mill, with annual capacity of 900,000 tons of wire rod; fabricated steel products, capable of producing about 350,000 of wire products and processed rod per year; and fastener operations with an annual capacity of 175,000 annually. Ivaco reported a CAD$200 million loss in 2003 on sales of CAD$775 million.
The Globe and Mail reported that Heico is expected to retain Ivaco’s nearly 2,500 employees spread through Canada and the U.S. Gone from the family-controlled company are former CEO Paul Ivanier and senior vice president Sidney Ivanier, who both quit during restructuring. The Ivaniers received criticism from investor Yves Beaudoin, who told the Toronto Star that they and other company managers engaged in “questionable” practices. “Even in the difficult years, (they) continued to pay themselves $5 million a year in salaries,” Beaudoin stated. “It’s a sad story, which ended badly for shareholders.”
Heico will retain current CEO Gordon Silverman, who received praise from Heico president El Roskovensky.
“I think current management has done a good job,” Roskovensky told the Globe and Mail. “They’re navigating their way through this process and the business is going along quite nicely.”
Roskovensky said Heico hopes to operate Ivaco companies as a stand-alone business.
Heico is controlled by financier Michael Heisley, who also owns the NBA’s Memphis Grizzlies. The company has controlling interest in wire manufacturers Davis Wire Corp. of Irwindale, CA, and National Standard Co. of Niles, MI, as well as ownership of telecommunications and plastics operations. Web: . ©2004/2012 Fastener Industry News
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