Linamar Comments on Receivable Exposure Levels With GM and Chrysler
April 02 2009 - 4:11PM
Marketwired
In light of the uncertainties existing in today's automotive
marketplace Linamar Corporation (TSX: LNR) is disclosing its
current receivable exposure levels to GM and Chrysler.
Linamar understands that under US bankruptcy laws, in the event
of a company entering chapter 11 bankruptcy, all goods delivered
within 20 days of the date of the chapter 11 filing obtain a
special priority and are paid as part of the chapter 11
reorganization, once the reorganization plan is approved. Any goods
shipped prior to 20 days before the date of the chapter 11 filing
are at risk. A GM or Chrysler bankruptcy would be a unique and
unusual event whose consequences can't be foreseen and there can be
no assurance of recovery.
The combined total of Linamar's receivables balance greater than
20 days with GM and Chrysler is in aggregate estimated to be less
than 30 million or approximately 9% of Linamar's total receivables
balance as of March 31st, 2009.
"Our typical experience with customers in the past that have
filed for chapter 11 protection is that we have been able to
recover up to half or more of at risk receivables", said Linamar
CEO Linda Hasenfratz. "We are pleased that our diversification
efforts have allowed us to minimize our risk with any one customer
in this way, particularly in light of uncertainties in the industry
at this time".
Linamar Corporation (TSX: LNR) is a diversified global
manufacturing company of highly engineered products. The company's
Powertrain and Driveline focused divisions are world leaders in the
collaborative design, development and manufacture of precision
metallic components, modules and systems for global vehicle and
power generation markets. The company's Industrial division is a
world leader in the design and production of innovative mobile
industrial equipment, notably its class-leading aerial work
platforms and telehandlers. With more than 11,000 employees in 37
manufacturing locations, 5 R&D centers and 11 sales offices in
Canada, the US, Mexico, Germany, Hungary, the UK, China, Korea and
Japan Linamar generated sales of over $2.2 Billion in 2008. For
more information about Linamar Corporation and its industry leading
products and services, visit www.linamar.com
Certain information regarding Linamar set forth in this
document, including management's assessment of the Company's future
plans and operations may constitute forward-looking statements.
This information is based on current expectations that are subject
to significant risks and uncertainties that are difficult to
predict. Actual results may differ materially from these
anticipated in the forward-looking statements due to factors such
as customer demand and timing of buying decisions, product mix,
competitive products and pricing pressure. In addition,
uncertainties and difficulties in domestic and foreign financial
markets and economies could adversely affect demand from customers.
These factors, as well as general economic and political
conditions, may in turn have a material adverse effect on the
Company's financial results. The Company assumes no obligation to
update the forward-looking statements, or to update the reasons why
actual results could differ from those reflected in the
forward-looking statements.
Contacts: Linamar Corporation Andrea Bowman (519) 836-7550 (519)
836-9175 (FAX) andrea.bowman@linamar.com www.linamar.com
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