Young An Hat Company Ltd (YAHC) of Buchsan, South Korea, will acquire Clark Material Handling Company's assets, and about USD10 million in debt, for USD7.5 million tomorrow.
YAHC was the successful bidder in an auction for Clark's assets.
The transaction ends Clark's bankruptcy, which it filed under Chapter 11 of the US Bankruptcy Code in April 2000, listing USD349 million in assets and USD374 million in debts.
YAHC plans to operate Clark by basing its manufacturing operation in Korea and the sales office and headquarters in Lexington, Kentucky, USA.
Clark chief executive Kevin Reardon told Forkliftaction.com that an unsuccessful bidder, a New York equity bank, had planned to dismantle the company.
Five companies submitted bids and deposits by the January 22 deadline, but three dropped out before the auction in Wilmington, Delaware, USA, on January 24. "One group couldn't show an ability to close the deal," Mr Reardon said.
The US Bankruptcy Court in Kansas City, Missouri, USA, authorised YAHC to proceed with its bid on January 27. YAHC chairman, chief executive and founder Sung Hak Baik was present throughout the proceedings, said Mr Reardon, who will remain as Clark chief executive under the new ownership.
Mr Reardon first became acquainted with YAHC through a Korean financial group that had worked to restructure Clark's debt in Korea during the company's bankruptcy. Mr Reardon was president of Clark's Korean operations for more than four years.
When a buyout deal with Sun Capital Partners Inc collapsed on December 23, a call to YAHC sparked interest. "We got on a plane on December 27 and spent a week with them," Mr Reardon said.
YAHC's bid provides USD5 million to pay debtor-in-possession financing, USD1.5 million for professional and legal services and USD1 million for administrative claims.
At the end of the bankruptcy, Clark had total debt of about USD252 million, including USD150 million owed to bond holders, USD50 million to trade creditors and the remainder in other claims. It is unclear what will happen to these debts under the new ownership.
Mr Reardon said Clark booked sales of USD220 million last year and projected a 20 percent sales increase this year, with Clark's parts business returning to normal.
YAHC, formed in 1959, is the world's largest hat manufacturer, and has diversified holdings including hotels, farm equipment, a supermarket chain and multiple bus manufacturing businesses. The company employs more than 4000 people and has projected 2003 sales of USD750 million.
Clark has built more than one million forklifts over 85 years, selling multiple product lines through more than 550 dealers worldwide.