Why Lynn Tilton may be selling Dura Automotive

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Lynn Tilton: Preparing to auction Dura? Photo credit: JOE WILSSENS

Financier Lynn Tilton collaborates with Jefferies Financial Group Inc. to find buyers for car supplier Dura Automotive Systems Inc. People familiar with the business told Bloomberg, while they launched part of the assets of its investment firm to repay creditors.

Dura, owned by Tilton's Patriarch Partners, could pick up about $ 1 billion, people said, who asked not to be identified because the case is not public. Jefferies is preparing Dura for an auction that is likely to attract interest from private equity companies and other auto parts suppliers, they said.

A representative for Jefferies declined to comment while representatives for Dura and Patriarch did not respond to requests for comments.

Legal arrangement

Dura enters the market after Tilton reached a legal settlement with bond insurer MBIA Inc. in May. The agreement included three bankrupt investment funds that Tilton and MBIA had set up to provide loans to distressed companies owned by the company for reversal.

Tilton agreed to stand up as head of money for at least 15 months, according to court documents. It can resume its position if it can repay MBIA and other creditors with proceeds from the sale or refinancing of a number of its portfolio companies. The documents do not publicly indicate which ones.

Tilton has 25 operating companies, including Dura, MD Helicopters Inc. and Rand McNally, she said in a bankruptcy filing that was filed in March.

Dura CEO Lynn Tilton attended the Automotive News PACE awards in Detroit with some of her executives. Photo credit: JOE WILSSENS

Dura history

Patriarch acquired Dura for $ 125 million in 2010, less than two years after the company was bankrupt. It now generates about $ 90 million in annual revenue before interest, tax, depreciation and amortization, said the people who were familiar with the issue.

Dura, located in a suburb of Detroit, designs and manufactures driver systems, lightweight metal vehicle frames, battery trays and other car body parts, according to the website. Dura placed number 98 on the Automotive News list of the top 100 global suppliers with worldwide car sales to $ 1.43 billion for the 2017 fiscal year.

Tilton publicly expressed her pride in her Dura investment over the years and promised to keep the company in 2010 and said, "It's just men I strip and flip."

Tilton started Patriarch in 2000 after two decades as an investment banker with, among others, Morgan Stanley, Goldman Sachs Group Inc. and Amroc Investments. She is a celebrity in business and specializes in buying companies in difficulty and solving them.

Automotive News contributed to this report.