weld goes belly up

http://www.tirereview.com/default.as...Text&item=5888 From: Greg Weld, Chairman

WELD WHEEL INDUSTRIES, INC.
Will Reorganize Operations – A Sale is Imminent.

Kansas City, Missouri, August 17, 2006.

I want to personally tell you about an important action the Weld companies have taken in order to complete a sale of the company. Weld has filed a voluntary petition for reorganization under Chapter 11 of the Bankruptcy Code.

Over the last 33 years, the Weld Racing brand has become an industry leader of forged alloy wheels for professional Motorsports, custom vehicles, lifted trucks, motorcycles and luxury cars and trucks. During the last 4 years, Weld Wheel has gone through a major growth period, moving into its new 280,000 s.f. manufacturing facility at 6600 Stadium Drive in Kansas City, Missouri and also adding over $10,000,000 in state of the art manufacturing equipment.

However, over the last 12 months, the company experienced a liquidity crisis caused primarily by three factors: 1) an ill-advised expansion into the importing of cast aluminum “commodity” custom wheels from China; 2) a 40% increase in raw aluminum costs; and, 3) a significant slow down of sales of wheels for trucks and SUVs, which was caused primarily by the huge spike in gasoline prices. We have taken many steps in a short period of time to counteract these forces.

Prior to the Chapter 11 filing, we executed an Asset Purchase Agreement to sell the Weld assets to a strategic acquirer. As you would imagine, several well-funded members of the industry and investment community expressed serious and competitive interest in acquiring Weld. The process of the sale will consummate over the next 6-8 weeks. In the interim, post-petition financing has been secured and operations will continue uninterrupted.

The course of action became necessary after all avenues seeking conventional refinancing options were exhausted.

The objective is to create a power house wheel company that concentrates and refocuses its efforts building on Weld Racing’s position as the dominate brand of forged alloy wheels in the racing and specialty automotive aftermarkets – markets that Weld Racing has dominated over the last 33 years.

Weld will introduce many exciting new products at the 2006 SEMA Show – October 31, November 1, 2 and 3 in Las Vegas, Nevada.

Over the next several weeks, Weld will move through the Chapter 11 process towards the sale of its assets as a going concern. At that point, the acquiring company will be identified. In the interim, you can expect the same top quality product and service from Weld that you know and expect. Our goal in this process is to preserve and strengthen our business so that Weld can compete and expand successfully in the future.

On behalf of the entire team at Weld, I want to thank you for your continued support and cooperation.

We look forward to many future years of supplying your specialty wheel needs.