(Reuters) - Northstar Aerospace Inc NASGF.PK sought protection from creditors in the United States and Canada, as the aircraft parts maker looks to put itself up for sale.
Northstar, whose customers include the U.S. government, Sikorsky Aircraft Corp and Agusta Westland, said it has entered into a “stalking horse” agreement with Wynnchurch Capital Ltd to sell its assets for about $70 million.
A stalking horse is a bidder chosen by a bankrupt company from a pool of potential bidders to make the first bid for its assets.
Northstar, however, said if it does not get a better offer, it will be unable to pay even its secured creditors.
While the company’s U.S. unit filed for Chapter 11 bankruptcy protection in a Delaware court, its Canadian unit will seek creditor protection under the Companies’ Creditors Arrangement Act (CCAA) for an initial period of 30 days.
Northstar had raised going concern doubts in September 2011.
Northstar said it will receive financing of up to $4 million during the CCAA and Chapter 11 proceedings from its lenders. The company has already received $7 million in DIP financing from Boeing Capital Loan Corp.
In its Chapter 11 petition, Northstar listed Pension Benefit Guaranty Corp, Supplemental Employee Retirement Pension Plan (US), Boeing Co as some of its largest unsecured creditors.
The company’s directors have decided to resign following the CCAA filing.
Northstar, which provides gears for Black Hawk helicopters and Rolls-Royce’s (RR.L) Trent engines, listed assets of up to $50,000 and liabilities of between $50 million and $100 million.
The case is In re: Northstar Aerospace (USA) Inc, U.S. Bankruptcy Court, District of Delaware, No:12-11817
Reporting by Shounak Dasgupta and Tanya Agrawal in Bangalore; Editing by Saumyadeb Chakrabarty