- Marelli has filed for bankruptcy due to tariffs and complications from the COVID-19 pandemic.
- The automotive supplier isn’t expecting any disruptions, but lenders are expected to take control.
- The firm is a key supplier to Nissan and Stellantis, and produces an assortment of parts.
Automotive supplier Marelli has filed for Chapter 11 bankruptcy in the United States. The move is being chalked up to a variety of factors including fallout from the COVID-19 pandemic and steep tariffs enacted by the Trump administration.
While the case is complex, Marelli said they decided to voluntarily file for bankruptcy to “strengthen our financial position as we navigate a challenging environment.” The company went on to say the move will enable them to “comprehensively restructure its long-term debt obligations.”
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Roughly 80% of lenders supported the restructuring and they’ll most likely take control of the company. That would be a big change, but Marelli said they’re not expecting any operational impacts from the bankruptcy.
They went onto say there shouldn’t be any disruptions as they’re working closely with their suppliers and “expect to continue operating as normal throughout this process.” The firm added they have received commitments for approximately $1.1 billion (£809 / €950 million) in debtor-in-possession financing. They believe those funds, as well as money generated from ongoing operations, will be enough to sustain the company throughout the restructuring process.
That process will take time, but Marelli CEO David Slump said “Industry-wide market pressures have created a gap in working capital that must be addressed. After careful review of the company’s strategic alternatives, we have determined that entering the Chapter 11 process is the best path to strengthen Marelli’s balance sheet by converting debt to equity, while ensuring we continue operating as usual.”
The Wall Street Journal noted Marelli is an important supplier to Nissan and Stellantis as it provides automakers with everything from lights to electronics. The publication also reported the company has more than 40,000 employees globally and noted Slump said the firm was “severely affected by tariffs due to its import/export-focused business.”
