The company stated that its distribution and manufacturing centers are operational and shipping customer orders
Rochester Hills, Mich.—First Brands Group announced last week a series of steps it has taken to stabilize its operations, strengthen leadership, and maintain continuity of supply and service for customers, including:
- Driving ordering patterns trending above 90% of pre-petition levels and new business opportunities with over 50 existing and potential customers since October.
- Making progress opening its supply chain in recent weeks, with over 95% of First Brands priority vendors working with the company and continuing to provide goods and services.
- Installing a refreshed management team, including interim Chief Executive Officer Charles Moore, and obtaining industry veterans Craig Barnes, Michael Broderick and Tim Turvey as senior advisors to facilitate a long-term business plan aligned with restructuring objectives.
First Brands stated that its distribution and manufacturing centers are operational and shipping customer orders. The company is also actively pursuing several pathways to create value for all stakeholders. These include operational, legal and financial initiatives.
Key growth initiatives include:
- Executing performance improvement opportunities, including targeted cost reductions, supply chain enhancements, and category-specific profitability initiatives.
- Capitalizing on strong industry positioning within the broader aftermarket and select OEM channels, where long-term demand trends remain favorable, according to First Brands.
Pursuing factoring solutions to bolster liquidity
First Brands is progressing discussions to restart traditional customer factoring programs in the ordinary course of business. While these efforts are underway, the company is simultaneously pursuing other factoring alternatives as well as expedited payment terms with its customers to improve operational delivery.
Advancing plans to access approximately $250M of customer receipts
First Brands filed a request on Friday, Dec. 12, for expedited relief to obtain near-term access to approximately $250 million that is either being held by customers or currently segregated in connection with the chapter 11 process.
These funds are related to customer receipts for orders that the company has already fulfilled but has not been able to access to date, thereby artificially impairing First Brands’ true liquidity and cash flows, and causing unfounded concerns regarding First Brands’ financial position.
The release of these funds will supplement the company’s existing $1.1 billion of debtor-in-possession financing to improve First Brands’ liquidity and support reinvestment in the business to drive long-term growth.
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