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U.S. Bankruptcy Court for the Northern District of Illinois Dec. 11 approved ABC-NACO Inc.'s asset sale to TCF Railco Acquisition Corp. (TCF) for $75 million.
The sale — still subject to Hart-Scott-Rodino Antitrust Improvements Act review — would include all operating assets of ABC-NACO's U.S. rail and track products, and rail services units (excluding Canadian and Mexican rail-product subsidiaries), plus the company's stock in European subsidiaries and Chinese joint ventures.
Under agreement terms, certain assets not included in the sale would be liquidated by TCF, with proceeds placed in ABC-NACO's debtor estate.
TCF plans to use sale and liquidation proceeds to help satisfy ABC-NACO creditors' claims. However, since ABC-NACO's senior-secured bank and other debt exceeds $170 million, TCF and ABC-NACO officials believe it's unlikely proceeds will be available to satisfy unsecured creditors' claims or provide recovery to shareholders.
TCF is owned by Three Cities Funds III L.P. and affiliates, which specialize in making controlled investments in medium-sized companies.
Lombard. Ill.-based ABC-NACO in October filed to reorganize under Chapter 11.