Unique Situation Related to U.K. Law; All Other Dana Operations Unaffected
RUGBY, Warwickshire, Great Britain, Feb. 28 /PRNewswire-FirstCall/ --
Dana Corporation's affiliate companies in the United Kingdom have today
concluded an agreement with their pension scheme creditors to settle a
substantial portion of their historic balance sheet liabilities in exchange
for a one-time cash settlement and a transfer of a portion of equity in the
business. This action will enable the companies to preserve jobs in the
U.K. and to complete the U.K. portion of Dana's planned global
divestitures.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990903/DANA )
"We have found a solution that ensures that our plants can continue to
operate normally, our business can obtain long-term secured financing, we
preserve as many jobs as possible, our suppliers continue to be paid, and
our customers continue to receive products on time and without disruption,"
said Ralf Goettel, president of Dana Europe.
The restructuring of the Dana U.K. companies has been achieved by
transferring liabilities of the companies to a newly funded special-purpose
company separate from the operating company group. This structure was
designed to protect the employees, customers and suppliers of the business
and to facilitate a consensual solution. With this action, the Dana U.K.
companies will remain on sound financial footing and will proceed with
business as usual on that basis.
Goettel said the issues faced by the U.K. business are not the result
of the Dana Chapter 11 filing in the United States. Rather, he said, the
nature of the U.K. obligations and U.K. law, combined with Dana's planned
divestiture of several non-core businesses, have forced the company to
address this issue regardless of any activity in any other region of the
world.
"I want to emphasize that none of Dana's operations in any other region
of the world will be affected by this initiative, including our operations
in other locations in Europe," he added. "This is an issue specific to the
U.K. only, and under the agreed solution, the liabilities being addressed
cannot be transferred to any other Dana group company in any other region.
All of our plants in every region, including the U.K., are open and
producing products for our customers as specified and delivering materials
on time, and will continue to do so. This will not change as a result of
the current actions in the U.K."
Dana has worked with the trustees of the pension schemes, the Pensions
Regulator and the Pension Protection Fund to reach this solution and the
Pensions Regulator has now issued a clearance statement.
The solution will enable the U.K. axle and driveshaft businesses that
are retained to:
- Continue normal plant operations with no disruption to customers;
- Secure financing with the opportunity to move forward without the
crippling burden of legacy pension schemes, thereby improving
competitiveness and future employment prospects;
- Provide for trade suppliers and employees to be paid on normal terms;
- Provide for the preservation of the highest possible level of accrued
pension benefits for current and past employees; and
- Maintain the largest possible level of employment opportunities.
Furthermore, Dana will be able to complete the planned divestitures in
the U.K., providing those businesses with a solid foundation for the
future.
"This solution creates a sound basis for our retained business to grow,
and for our divested businesses to prosper under new ownership," Goettel
added.
About Dana Corporation
Dana is a leading supplier of drivetrain, chassis, structural, and
engine technologies. Dana people design and manufacture products for every
major vehicle and engine producer in the world. Based in Toledo, Ohio, with
operations throughout the world, Dana is focused on being an essential
partner to automotive, commercial, and off-highway vehicle customers, which
collectively produce more than 60 million vehicles annually. The company's
continuing operations reported sales of $8.6 billion in 2005. Dana'
Internet address is http://www.dana.com/.
Dana and certain of its U.S. subsidiaries are operating under Chapter
11 of the U.S. Bankruptcy Code as debtors in possession. Information about
the bankruptcy proceedings can be found at
http://www.dana.com/reorganization. While Dana continues its reorganization
under Chapter 11, investments in its securities are highly speculative.
Although shares of Dana common stock continue to trade on the OTC Bulletin
Board (OTCBB) under the symbol "DCNAQ," the trading prices of the shares
may have little or no relationship to the actual recovery, if any, by the
holders under any eventual court-approved reorganization plan. The
opportunity for any recovery by holders of Dana common stock under such
reorganization plan is uncertain and shares of Dana common stock may be
cancelled without any compensation pursuant to such plan.
Forward-Looking Statements
Statements in this release regarding the impact of the Dana U.K.
restructuring on the Dana's continuing operations in the U.K. and regarding
Dana's planned divestitures of other U.K. operations constitute "forward-
looking" statements within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements represent Dana's expectations based on
its current information and assumptions. Forward-looking statements are
inherently subject to risks and uncertainties. Actual results could differ
from those that are anticipated. Dana does not undertake to update any
forward-looking statements in this release.
SOURCE Dana Corporation
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CONTACT:
Paul Burman of Dana Corporation,
+44-1788-538601, or paul.burman@dana.com
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