MINNEAPOLIS, Minn. – New boat orders are keeping most of Genmar Holdings LLC’s boat factories operational “today and for the foreseeable future” and helping it develop plans to exit Chapter 11, wrote Genmar Chairman Irwin Jacobs in a letter to dealers dated today.
“The environment we are in, not dissimilar to what the more well-publicized automotive and other numerous industries have been and continue to be going through, still allows for businesses to exit Chapter 11 as successful companies,” he wrote. “With the actions that we are taking at Genmar along with the recent continued positive economic news, we are working hard for Genmar to exit Chapter 11 as a strong successful world leader in the recreational boating industry.”
Jacobs explained that having stronger predictable order backlogs is allowing the company to more confidently firm up its business plan and strategies for exiting the Chapter 11 process, “and most importantly, to satisfy as effectively as possible all of the various constituencies.”
During the last few weeks, Genmar has begun selling and/or entering into agreements to sell several of its non-core surplus assets, he added. By using the funds generated from those sales to reduce its loans, Genmar expects to be provided with refinancing opportunities “that we confidently believe will allow us to be able to execute and finalize our reorganization plan through the U.S. Bankruptcy Court.”
To assist the company in its reorganization, the plan for which is due by September 29, Genmar has retained the investment banking firm of Houlihan Lokey Howard & Zukin Capital, Inc. (Houlihan) to serve as Genmar’s strategic advisors.
“The obstacles all of you continue to successfully face in the marketplace, along with what our Genmar boat companies’ employees are also enthusiastically facing every day, continue to give me and the entire Genmar management group great encouragement and resolve to successfully file our plan of reorganization and obtain court approval as quickly as possible,” Jacobs wrote. “As we all proceed forward, the most important factor for all of us is to successfully keep managing our businesses, which is obviously a key essential ingredient to our reorganization plan complimented by a strong Genmar dealer base.”