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BANKRUPTCY COURT AUTHORIZES RELEASE OF HARVARD INDUSTRIES' REORGANIZATION PLANS

 BANKRUPTCY COURT AUTHORIZES RELEASE OF
 HARVARD INDUSTRIES' REORGANIZATION PLANS
 FARMINGDALE, N.J., June 11 /PRNewswire/ -- William D. Hurley, chairman and chief executive officer of Harvard Industries, Inc., announced today that the Bankruptcy Court that is supervising the company's chapter 11 proceedings had authorized release of a disclosure statement describing plans for the financial reorganization of the company and its subsidiaries.
 Under the plans, all of the company's subordinated debentures would be exchanged for $75 million of 14.25 percent pay-in-kind preferred stock due 1998 plus 91 percent of the common stock of the reorganized company, removing $225 million in principal and accrued interest from the company's balance sheet. The remaining 9 percent of the company's common stock would be held by Harvard Industries' present stockholders. If Harvard Industries achieves certain operating targets over the next three years, the current equity owners would increase their ownership to 37 percent of the common stock.
 The plans also call for payment in full of all pre-bankruptcy trade claims, amounting to in excess of $50 million. Monthly payments to holders of trade claims would begin later this year; all outstanding balances will be repaid by Oct. 15, 1994. The trade claims will earn interest at a 9 percent annual rate until repaid.
 Also covered by the reorganization is bank debt in the amount of approximately $100 million.
 "This is an exciting step for Harvard," said Hurley, who will continue to direct the company's operations as its chairman and chief executive officer. "We see substantial opportunities in the automobile industry during the coming years and believe our customers and suppliers will welcome this strengthening of the company's financial position."
 Wilbur L. Ross Jr., senior managing director of Rothschild, Inc., financial advisor to the debentureholders' committee, added, "The financial community always prefers to see recapitalizations that arise from consensual negotiations rather than litigation. The equity that the company's debentureholders will receive represents the best treatment they are likely to receive on a consensual basis in the foreseeable future."
 Michael Hoffman, general partner of the Blackstone Group and financial advisor to Harvard Industries, sees the restructuring as a significant competitive advantage for the company. "The automobile manufacturers are looking to do business with a smaller number of healthy and innovative component suppliers. Harvard Industries has certainly emerged from reorganization as a key player in the industry."
 The court decision concludes several months of successful negotiations among Harvard Industries and representatives of its major creditor groups. The committees representing the company's debentureholders and unsecured trade creditors advised the court that they endorsed Harvard's plan and would recommend it to their respective constituents.
 The disclosure statement and plans will be circulated to all of the company's creditors later this month. A confirmation hearing will be held on Aug. 7, 1992, before Judge Helen Balick, who has been overseeing the company's reorganization.
 Harvard Industries' primary business is the designing, engineering and manufacturing of automotive accessories, parts and components principally for automobile companies producing cars and trucks in North America. The company is a leading supplier to the domestic automobile market. Harvard Industries also manufactures specialty fasteners and armament and electronic products for the aerospace industry, and office furniture. The company's sales for its most recent fiscal year ending Sept. 30, 1991, exceeded $600 million.
 -0- 6/11/92
 /CONTACT: William D. Hurley of Harvard Industries, 908-938-9000, or Wilbur L. Ross Jr., 212-757-6000, or Michael Hoffman, 212-836-9858, both for Harvard Industries/ CO: Harvard Industries, Inc. ST: New Jersey IN: AUT SU: BCY


PS-OS -- NY067 -- 9384 06/11/92 16:08 EDT
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Publication:PR Newswire
Date:Jun 11, 1992
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