Chilean Car Seller Automotores Gildemeister Files for Bankruptcy

Latin American vehicle importer and distributor Automotores Gildemeister SpA has filed for bankruptcy protection in the U.S. with a prepackaged reorganization plan to cut about $200 million in debt, WSJ Pro Bankruptcy reported. The Santiago, Chile-based company, along with 12 affiliates, filed for chapter 11 Monday in the U.S. Bankruptcy Court in New York. The privately held company had warned earlier this month that it would file for reorganization in the U.S. with support from its international noteholders. The bankruptcy includes its businesses in Chile, Uruguay and Brazil, and excludes the operations in Peru and Costa Rica. Automotores Gildemeister, or AG, imports, distributes and sells new and used vehicles, provides maintenance and repair services, and brokers insurance and financing services. The company sells 12 brands, primarily Hyundai, through 70 company-owned vehicle dealerships, including 46 in Chile, 19 in Peru, 3 in Uruguay and 2 in Costa Rica. It also distributes vehicles to 158 franchised dealerships in Chile and Peru. The company has struggled financially due the Covid-19 pandemic and related government-mandated lockdowns, the sustained increase in the currency exchange rate in recent years and social unrest in Chile in October 2019 that have sapped consumer confidence and eroded demand for vehicles, according to court papers. Read more.