Dana Corporation (fka DCNAQ)

[morcash]

Court Confirms Dana Corp's Plan To Exit Bankruptcy
Wednesday 12/12/2007 1:35 PM ET - Dow Jones News
By Christopher Witkowsky Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--A federal court Wednesday confirmed Dana Corp.'s (DCNAQ) Chapter 11 reorganization plan, paving the way for the auto-parts supplier to emerge from bankruptcy by the end of January.
After more than two days of hearings, Judge Burton Lifland of the U.S. Bankruptcy Court in Manhattan approved the plan, which will repay Dana's unsecured creditors between 72 cents and 86 cents for every dollar of the $3 billion they're owed.
The company said 96% of its unsecured creditors voted in favor of the reorganization plan.
"The plan is feasible, fair and equitable," Lifland said.
(This article also appears in Daily Bankruptcy Review, a publication from Dow Jones & Co.)
Dana, based in Toledo, Ohio, will emerge from bankruptcy a leaner company after having shed about 8,000 of its 44,000 employees and shut down non-core businesses. Much of the workforce reduction was the result of the sale of various Dana businesses.
Dana said its bankruptcy-reorganization has resulted in annual savings of between $440 million and $475 million. In court papers, the company said it managed to squeeze about $180 million in annual price increases from its customers.
Dana plans to borrow $2 billion from Citigroup Global Markets Inc., Lehman Brothers (LEH), and Barclays Capital to supplement $790 million in new equity to fund its exit from bankruptcy protection. Dana plans to sell as much as $540 million of new preferred stock to qualified unsecured creditors through a rights offering.
Private-equity firm Centerbridge Capital Partners, which has agreed to purchase $250 million in new Series A preferred shares, will backstop $250 million of the $540 million rights offering. A group of Dana bondholders will backstop the sale of the remaining $290 million in Series B preferred shares.
The reorganized Dana will have a nine-member board of directors consisting of some of the biggest names in the automotive industry, including John Devine, former chief financial officer of General Motors Corp. (GM), Jerome York, former chief financial officer of Chrysler Corp. and Richard Gephardt, a former U.S. representative with strong ties to organized labor. Dana's chief executive, Michael Burns, will retain his post.
Dana, which makes axles, driveshafts and other parts, entered bankruptcy in March 2006 amid a downturn in the U.S. auto industry. Other parts suppliers also fell into bankruptcy, including Delphi Corp. (DPHIQ), GM's former parts unit, and Dura Automotive Systems (DRRAQ).
-Christopher Witkowsky, Dow Jones Newswires; 201-938-4296; [e-mail]