Auto parts maker Stanadyne LLC filed for bankruptcy Thursday, saying it has been “crippled” by the rising costs of variable-rate debt owed to top creditor Cerberus Capital Management LP, WSJ Pro Bankruptcy reported. Interest rates on the automotive supplier’s $273 million in debt have risen “into the teens,” according to a sworn declaration by Chief Executive Officer John Pinson, with potentially more rate increases on the horizon as benchmark rates rise. Stanadyne can’t keep operating with the current debt load and filed for chapter 11 protection to get breathing room to reorganize as a financially stable business, according to his declaration filed in the U.S. Bankruptcy Court in Wilmington, Del. The company, which has $3.8 million in cash on hand, has been negotiating with Cerberus since November, Mr. Pinson said. Jacksonville, N.C.-based Stanadyne designs and makes fuel injectors, pumps and other parts for diesel and gasoline internal combustion engines, serving both the original equipment market and the aftermarket for everything from passenger vehicles to tractors to utility vehicles. It says its roots date back more than 140 years. Stanadyne has 468 U.S. employees working in states that include South Carolina, North Carolina and Michigan. The company also has affiliates in Italy, the United Arab Emirates, India and China. It said it has made nearly $100 million of capital expenditures in its manufacturing plants since 2014.
