The Marelli Corp. headquarters in Saitama, Japan. (Kiyoshi Ota/Bloomberg)
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Marelli Holdings Co., the struggling auto parts supplier for Nissan Motor Co., Stellantis NV and other carmakers, plans to seek Chapter 11 bankruptcy protection in the U.S. to slash its debt burden and restructure under new ownership, according to people familiar with the matter.
Should the proposal go through, global investment firm Strategic Value Partners, led by Victor Khosla, will effectively become the new owner of Marelli after it led a deal that satisfied creditors, one of the people said, who asked not to be identified because the information isn’t public.
KKR & Co., the U.S.-based private equity group that created Marelli in 2019 by merging its Calsonic Kansei and Magneti Marelli units, will transfer its shares to the consortium of lenders as part of the proposed deal, the person said. The auto parts supplier has been caught up in industry upheaval as electrification and automation force global carmakers to shift their strategy to cope with declining sales in key markets.
Representatives for KKR and Marelli declined to comment. Strategic Value Partners didn’t respond to an email seeking comment.
Marelli, which employs more than 50,000 people, had sought unsuccessfully to restructure over the past few years as orders from customers fell. The manufacturer based in Saitama, Japan, operates around 170 facilities globally that supply lighting systems, air conditioning, electric motors, suspensions and other components to carmakers.
Apart from SVP, Marelli’s creditors include Deutsche Bank AG, Mizuho Financial Group Inc. and other lenders. The consortium also includes Seoul-based MBK Partners Ltd. and New York’s Fortress Investment Group LLC, the person said.
Marelli filed for court-led rehabilitation in 2022 and at that time, its total debt was around 1.1 trillion yen ($7.6 billion), the most ever for a Japanese manufacturer. That was since reduced to around 650 billion yen.
Written by Reed Stevenson, Giulia Morpurgo and Dorothy Ma
