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Ross to invest $55 mn in new entity to acquire assets of GST
13
Jul '09
Global Safety Textiles LLC ("GST") announced that it had received a proposal from funds managed by WL Ross & Co. LLC ("WLR") to invest $55 million in a newly formed entity that would acquire the assets of GST and its subsidiaries. The new GST would have one of the strongest, well capitalized balance sheets in the automotive industry with a limited amount of long-term debt. After the transaction, the new GST will be well positioned to continue to expand its geographic footprint which today spans Europe, the Americas and China.

Georg Saint-Denis, President of GST Europe and Asia, commented on the transaction, saying, "This new equity investment will enable GST to continue to support its strategic international customers who have benefited from GST's technological innovation and will continue to enjoy GST's commitment to price competitiveness and customer service. GST's management and board believe that the WLR transaction is the best alternative for GST at this time and that we need to act quickly to preserve the value of our business. Our next step is to obtain our lenders' consent and we plan to recommend that our lenders provide that consent as soon as possible."

Wilbur L. Ross, Chairman and Chief Executive Officer of WL Ross & Co. LLC, said, "We are excited to make a proposal that we believe would put GST on a stable footing and ensure that it can continue to support its key strategic customers in all the major car producing regions globally. We expect that the proposed transaction with our sponsorship will be key to continuing relationships between GST and those customers." WL Ross & Co. LLC and its funds have been involved in the automotive industry as an investor in both Tier One and Tier Two suppliers.

WLR also delivered a DIP loan commitment for $25 million, which, if accepted, will help provide GST with liquidity until the proposed sale is consummated.

GST is a wholly owned subsidiary of International Textile Group, Inc. ("ITG"). Mr. Ross is the chairman of the board of ITG and certain entities affiliated with WLR own a substantial majority of the outstanding equity securities of ITG. GST and certain of its subsidiaries filed for protection under chapter 11 of the Bankruptcy Code on June 30, 2009. The proposed transaction would also be subject to higher and better offers, definitive documentation and bankruptcy court and priority lender approval.

International Textile Group Inc

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