Fuel engine maker Briggs & Stratton submitted for individual bankruptcy on Monday to effectuate a sale of the business as it faces losses, pending debt payments and the coronavirus disaster.

As aspect of the Chapter 11 filing, personal equity firm KPS Capital has manufactured a $550 million “stalking horse” offer to purchase all of Briggs & Stratton’s assets. It will also provide $265 million to hold the business functioning all through the individual bankruptcy course of action.

The filing arrived soon after Briggs issued a likely-concern warning and hired restructuring advisers in May perhaps to assistance address its debt burden.

“Over the earlier a number of months, we have explored various solutions with our advisers to improve our economic placement and overall flexibility,” CEO Todd Teske explained in a news release. “The issues we have confronted all through the COVID-19 pandemic have manufactured reorganization the hard but vital and acceptable route forward to secure our organization.”

The coronavirus pandemic experienced included to Briggs’ liquidity difficulties as the business shuttered crops and its prospects minimized orders. Its profits fell by eighteen% to $474 million in the 3rd quarter ended March 29 and it was expecting a $157 million profits strike from the pandemic for the fourth quarter.

Briggs, which was launched in 1908 by inventor Stephen Briggs and trader Harold Stratton, makes engines that are utilised principally by the garden and back garden tools market for garden mowers, back garden tillers, and snow throwers. Its solutions are bought in much more than one hundred international locations.

In accordance to the Milwaukee Journal Sentinel, the business was “losing dollars and burdened by substantial money owed when the economic downturn brought about by the coronavirus pandemic strike.”

As of March 31, Briggs experienced brief-phrase debt of $597.five million and prolonged-phrase debt of $seven million. The brief-phrase debt features $195.five million in bonds due in December that experienced to be refinanced by Sept. 15 or the business would be in violation of its financial loan agreements with a consortium of banks, enabling them to desire speedy reimbursement.

KPS Capital’s bid sets a minimal selling price for Briggs’ assets. “KPS intends to improve the new Briggs & Stratton aggressively as a result of strategic acquisitions,” Co-Managing Lover Michael Psaros explained.

Briggs & Stratton, chapter 11, coronavirus, Debt Load, gasoline engines, KPS Capital, restructuring, stalking horse bid, Todd Teske