TMD Files for Insolvency in Germany

TMD Friction's German companies filed for insolvency yesterday as the auto supply group became the latest victim of the global downturn, the Financial Times reported. The private Luxembourg-registered group, the industry's second-biggest supplier of brake pads and linings after America's Federal-Mogul, said the rapid slowdown in the industry had "led to a very high level of pressure on our cash flow." Its owners are looking to sell the business, and are in talks with potential private equity investors, according to its chief executive. TMD does the bulk of its business in Europe, where it supplies all of Germany's carmakers, with units in North and South America and Asia. Unlike many of its competitors, TMD generates two-thirds of its earnings from supplying replacement parts, which it claims makes it less exposed to the slowdown. TMD had been in talks with lenders about restructuring its roughly €400 million ($516 million) debt or a sale before yesterday's insolvency filing. Read more. (Subscription required.)