Unique Fabricating Inc., an insolvent GM supplier that provides plastics, rubber and foam, has come to terms with three of its largest customers to remain afloat.
According to a report from Crain’s Detroit Business, General Motors, Stellantis and Yanfeng Automotive Interior Systems have come to an agreement with Unique Fabricating to raise prices and investments until the U.S.-based insolvent company is able to restructure itself. At the same, Unique Fabricating also entered a forbearance agreement with lender Citizens Bank N.A., which stipulates that the company must pay $1.23 million in past due interest, attorney, and adviser fees.
“The accommodation agreement provides for specified price increases to be paid by customers during the term or other funding to be provided by customers to the company through the purchase by customers of a junior tranche of debt to be established under the credit agreement of up to $15 million in the aggregate,” the filing said.
This development comes as recent financial reports indicate that Unique Fabrication posted a $6.2 million operating loss and $10.6 million net loss in Q3 2022, with full-year sales projected at $136 million. Additionally, the U.S.-based company only had $500,000 in cash and $1.3 million in liquidity under its revolving credit facility.
It’s worth noting that Rivian Automotive and Bosch are also Unique Fabricating customers. In addition, the company intends to remain in operation during the restructuring process.
“GM is aware of the developments at Unique Fabricating and is supportive of it as a going concern,” GM spokesperson David Barnas was quoted as saying. “As such, we are working with several of Unique Fabricating’s other customers and its creditors to allow them to be viable long-term through either a restructuring or sale. We do not expect any interruption to GM supply during this process.”