Akebono Brake Files for Out-of-Court Rehabilitation
Tokyo, Jan. 30 (Jiji Press)--Major Japanese auto parts maker Akebono Brake Industry Co. <7238> said Wednesday it has filed for an out-of-court business rehabilitation process known as alternative dispute resolution, or ADR, due to financial difficulties caused by a slump in its U.S. operations.
Akebono Brake said there are no problems in the company's cash flow at present. But its partner financial institutions are preparing support measures, including debtor in possession financing, for a rainy day.
Business rehabilitation ADR is a framework for pursuing business reconstruction by settling disputes between creditors and companies with the help of a third-party organization and without the involvement of a court. Nonbank lender Aiful Corp. <8515> and Tokyo-based major jeans maker Edwin Holdings filed for ADR processes in the past.
Akebono Brake, established in 1929 and listed on the first section of the Tokyo Stock Exchange, suffered a decline in orders after a U.S. automaker made a model change in its mainstay vehicle.
On the ADR filing, Akebono Brake said related procedures will cover financial institutions and not affect its trade partners including clients and suppliers. The first meeting of its creditors is slated for Feb. 12.
[Copyright The Jiji Press, Ltd.]