Negotiations between Monaco Coach Corp. and Navistar International Corp – the company seeking to buy Monaco’s RV-related assets – will continue into early April, when the two companies hope to sign a final agreement.
The sale could be completed by late June, according to documents Monaco filed with the U.S. Bankruptcy Court.
Bankrupt Coburg, Ore.-based Monaco announced Thursday (March 26) that it has found a possible buyer in Navistar, a massive Illinois- based corporation that makes everything from school buses to military vehicles, according to The Register-Guard, Eugene, Ore.
Navistar issued a nonbinding letter of intent to buy some elements and liabilities associated with Monaco’s recreational vehicle manufacturing, Monaco spokesman Craig Wanichek said.
Navistar — which has 17,000 employees worldwide and is the leading producer of long-haul trucks in the United States — is looking to buy Monaco’s core RV assets for up to $50 million, Wanichek said.
Navistar declined to say what it plans for the Coburg headquarters and idled Coburg factory, but Wanicheck indicated that the new owner would restart the plant.
“They wouldn’t have put out a letter of intent that included those assets if they didn’t see the value of what we did here,” he said. “Our plan is to get as many people back to work as soon as we can.”
Should the deal go through as planned, Navistar would own all of Monaco’s RV brand names, its closed factories in Coburg and Indiana, plus equipment and intellectual property, Wanichek said.
Navistar also would assume some of Monaco’s liabilities, but Wanichek declined to discuss more details of which debts would be covered.
“It’s very good news,” the Monaco spokesman said. “This is an extremely important step to keep the process moving forward.”
Earlier this month, Monaco laid off 2,000 employees in Oregon and filed to reorganize under Chapter 11 of the federal bankruptcy code.
A spokesman for Navistar on Thursday said he could not say much about a deal that’s still in the works.
“We do think Monaco is a quality company, and we think there’s potential there, or we wouldn’t have entered into negotiations,” said the spokesman, Roy Wiley.
The company put most of its workers on unpaid leave late last year, then terminated 2,000 of its 2,145 employees on March 2. Three days later, the company filed for bankruptcy.
News of a potential buyer surfaced Wednesday, when Monaco listed an unnamed potential buyer in parts of a 60-page financial plan it filed in U.S. Bankruptcy Court.
The proposed sale would enable Monaco’s secured lenders — Bank of America and Ableco — to be repaid, Wanichek said. Secured lenders have a legal hold on company’s physical property, such as real estate and equipment.
Still up for sale through Nashville, Tenn., investment bank Avondale Partners are Monaco’s luxury motorhome resorts in California, Las Vegas and Florida.
Wanichek said the company is working with potential buyers for those properties as well.
Monaco owes Ableco $37.4 million, and Bank of America and other lenders $36.3 million. In its bankruptcy filing, Monaco estimated that it has 25,000 to 50,000 additional creditors.
Should all of Monaco’s assets be sold, the company may be able to pay some of its un secured creditors as well, Wanichek said. Unsecured creditors — those who have no legal hold on a company’s physical assets — typically are paid only after secured creditors have been satisfied.
Navistar is based in Warrenville, Ill., a suburb of Chicago. The 175-year-old company focuses on large truck production, military vehicles and diesel engines and has $15 billion a year in sales.