Holley bankrupt

[ebxr8240]

http://www.autoblog.com/2008/02/12/a...or-bankruptcy/
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Here's some propaganda from Holley I lifted from a post on YB....they sound like they are robbing Peter to pay Paul but I don't know anything about finances.

Hello guys, my name is Shane Weckerly and I am the Director of Product Management at Holley. I know the “bankruptcy” word sounds bad, but Holley is fine. Please read the official press release below and then our further comments below that.


BOWLING GREEN, KENTUCKY, February 11, 2008 - Holley Performance Products Inc. (the “Company”) announced today that its Owner/Investors have overwhelmingly approved a plan to dramatically enhance the Company’s capital structure by converting a majority of the Company’s debt into equity.

Thomas W. Tomlinson, the Company’s Chief Financial Officer, said today that “This is a prudent financial move on the part of our Owner/Investors – it tremendously strengthens our Company’s financial position and provides substantial flexibility to invest in our future. This investment will allow the Company to realize its full growth potential and will maximize the value we can return to our investors. The actual conversion of debt into equity will be accomplished through a “Prepackaged” bankruptcy filing that will cancel-out the old capital structure and formally establish the new one. Customers, suppliers, and employees will not be affected.” Mr. Tomlinson emphasized that, “It will be “business-as-usual” at Holley throughout the restructuring process which we expect to be completed in as few as 45 days.”

James D. Wiggins, the Company’s Chief Executive Officer, went on to say that “We are very pleased with the transformation that has taken place here at Holley over the last several years. Today Holley is a lean and focused enterprise with strong customer relationships, significant technological capabilities, and diversified revenue sources. We have established a good track record of profitability and growth in enterprise value. This restructuring represents the culmination of tremendous effort on the part of the team at Holley and we are excited to share news of this successful program with you.”

Holley is a leader in the performance engine market, and is used throughout the world in racing, street, marine, and powersports. Holley’s family of companies includes the leading brands in the performance market including: Holleyâ, Weiandâ, Hookerâ, FlowTechâ, Earl’sâ, and NOSâ.


So, what does this mean to you, the racer/enthusiast/consumer? It means that Holley will be a much healthier company and able to bring you better products, technology and support. This can now be done because we won’t be under the same financial constraints of the last few years.

Essentially, what has happened is that the original investment group will transfer ownership to the second tier of investors who were a minority owner. As a result, the debt we now owe is significantly less and puts us in a better position for the future.

This was intentionally structured this way so our vendors, employees and consumers wouldn’t be impaired in any way. It will be business as usual:
Product will be available as always with no interruption in supply
Race contingency and event sponsorship programs will continue as planned
Technical service support via phone, e-mail and at track is unchanged
All product warranty systems are continuing as normal
New product development is ongoing and we expect to release several exciting new programs throughout the year and at SEMA/PRI.
Of course, if you want to go ahead and stock up on our parts, we would love that too...
Thirty Years ago, when I was working for Holley Engineering in Warren, Michigan at their engineering center, they were making money from all of the OEMs and giving it to Coltec (part of the Colt Firearms Group). They had a bunch of plants in the south, a lot of employees, and was a well respected company.

After a few years, Coltec decided to keep the OEM side of the business making Air Pumps, transmission solenoids, and other parts and sold the "Hot Rod" side of the business to three Holley employees. Over the years the new owners ran the business into the ground with bad decisions, in my mind. I think they tried to be another Joe Hrudka "Mr Gasket" type success story. When they bought all of these small companies: Hooker Headers, Earl's, Weiand, NOS, Lunati, and Flowtech" they were basically giving those "Mom and Pop" companies "Golden Parachutes" with big payments for each company purchased with little knowledge on how to effectively run the companies.

Then they sued Barry Grant for parent infringement which took still more money. Barry is probably smiling right now on this deal.

Most stayed with OEM side of Holley and were later bought by Borg Warner who is making good profits these days. I feel bad for the retirees who stayed on with the Hot Rod side of Holley.