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Motor Coach Emerges From Bankruptcy Protection

The Associated Press

BISMARCK, N.D. (AP) — Motor Coach Industries Inc., which makes commuter buses and luxury motor coaches, said it has emerged from Chapter 11 bankruptcy protection with a new majority owner.

The Schaumburg, Ill.-based company operates a bus plant in Pembina, in northeast North Dakota that employs about 220 people. MCI said in a statement Monday that it emerged from voluntary reorganization on Friday.

MCI filed for Chapter 11 bankruptcy protection in September. The company said at the time that the pre-negotiated bankruptcy filing would reduce the company's debt by $420 million by cutting interest by $54 million annually.

MCI said it has obtained a $230 million credit line, and its new majority owner, Franklin Mutual Advisers LLC, converted $200 million of debt into equity. Franklin Mutual Advisers is a subsidiary of San Mateo, Calif.-based Franklin Resources, Inc., a global investment management company.

MCI says it also got a $155 million loan from a group of lenders.

"The completion of our financial restructuring is a major milestone in the 76-year history of MCI," Tom Sorrells, MCI president and chief operating officer, said in the statement. "I am particularly pleased that, given a very challenging economic backdrop and the tight credit markets, we were able to complete the process in just seven months."

MCI makes big buses for public transportation and motor coaches that are used as luxury RVs. At its peak in the mid-1990s, the Pembina bus plant had more than 800 people on the payroll.

MCI's main plant is in Winnipeg, Canada. The company uses the Pembina bus facility to meet conditions of the federal Buy America Act, which requires that buses used in federal contracts be produced in the U.S.