This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Cramer's Action Alerts PLUS - See his portfolio and get alerts BEFORE every trade. Learn more NOW!

Motorcar Parts Of America Subsidiary Enters Into Strategic Cooperative Agreement With Global Automotive Parts Manufacturer

LOS ANGELES, Aug. 23, 2012 (GLOBE NEWSWIRE) -- Motorcar Parts of America, Inc. (Nasdaq:MPAA) today announced its Fenco subsidiary has signed a multi-faceted strategic cooperative agreement with one of the world's largest automotive manufacturers of new undercar products -- including a $20 million trade line of credit for Fenco, joint sourcing and quality commitments, as well as expected joint product development and marketing initiatives.

"This strategic cooperative agreement will greatly enhance the liquidity of our Fenco subsidiary and should provide a strong strategic alliance for new product development for both our undercar and under-hood product lines. In conjunction with this agreement, M&T Bank, the current lender for Fenco, will extend the Fenco line of credit maturity until October 2014 and increase its line of credit by $5 million," said Selwyn Joffe, chairman, president and chief executive officer of Motorcar Parts.

"This alliance is expected to greatly enhance the aftermarket industry position of Motorcar Parts of America and its subsidiaries for new and remanufactured units," Joffe added.

In connection with the agreement and pursuant to a fully subordinated guaranty associated with the $20 million line of credit, Motorcar Parts of America has agreed to guarantee these obligations and provide the supplier with the right after July 1, 2014 to sell up to $8.0 million of outstanding obligations to the company in exchange, at the company's option, for shares of common stock valued at $7.75 per share, subject to certain adjustments, or cash in an amount of 135 percent of the amount of the outstanding obligations being sold to Motorcar Parts of America.  The exercise of these options will reduce the company's liability with respect to the guaranty of the obligations.

In connection with the line of credit agreement, the company has also agreed to issue a warrant to purchase 516,126 shares at an exercise price of $7.75 per share. The warrant is proportionately forfeited if the right to convert the loan is exercised.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Try it NOW
Only $9.95
Try it NOW
14-Days Free
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,195.14 -93.49 -0.51%
S&P 500 2,107.94 -9.45 -0.45%
NASDAQ 4,981.4240 -26.6720 -0.53%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs