U.S. auto parts supplier First Brands Group filed for Chapter 11 bankruptcy protection on Monday, weighed down by more than $6 billion in debt from a string of acquisitions.
The company, which owns aftermarket brands including Raybestos brake solutions, TRICO wiper blades and FRAM filters, said it secured $1.1 billion in debtor-in-possession financing from first-lien lenders to support operations during the restructuring. The filing applies only to U.S. operations, with global activities expected to continue without disruption, it added.
First Brands disclosed assets of more than $1 billion against liabilities exceeding $10 billion in its petition to the U.S. Bankruptcy Court for the Southern District of Texas. Several affiliated companies, including Carnaby Capital Holdings, also filed for bankruptcy protection last week.
The financial distress at First Brands follows the recent collapse of subprime auto lender Tricolor Holdings, fueling concerns among debt investors of broader weakness in credit markets. Fitch Ratings downgraded the company last week, warning its options for managing its obligations were narrowing.
Privately held First Brands grew into a major player in the automotive aftermarket through debt-financed acquisitions of rivals, but its loans plunged in value in recent weeks as creditors braced for a restructuring. Court filings show Carnaby Capital listed assets above $500 million and liabilities of more than $1 billion.
Several Wall Street lenders and hedge funds, including Jefferies and Millennium, are exposed to First Brands through supplier invoice-linked facilities, according to sources familiar with the matter.