Japan-based automotive supplier Marelli filed for Chapter 11 bankruptcy protection in the US on Wednesday, as it moves forward with a restructuring plan that will transfer ownership from private equity firm KKR to its lenders.
The filing in US Bankruptcy Court in Delaware follows prolonged financial challenges for Marelli, including pandemic-related supply-chain disruptions and the impact of global tariffs. The company has secured $1.1 billion in debtor-in-possession financing from its lender group, which supports a restructuring agreement involving over 80% of the firm’s senior lenders.
Marelli supplies key vehicle components—including lighting systems, electronics, and displays—to major automakers such as Nissan, Volkswagen, BMW, Stellantis, and Mercedes-Benz. In a statement, the company said it does not expect any operational disruptions during the Chapter 11 process.
CEO David Slump cited the cumulative impact of COVID-19, international trade tariffs, and the semiconductor shortage as factors that severely affected Marelli’s financial stability.
“Marelli was severely affected by tariffs due to its import/export-focused business and the imposition of tariffs specifically against automotive manufacturers and suppliers,” Slump said in a court filing.
The pandemic limited access to raw materials and labor, he added, while the semiconductor shortage further disrupted automotive production, inflating costs and compressing margins. As a result, Marelli was unable to sustain its nearly $5 billion debt load.
Marelli’s proposed restructuring will eliminate all secured debt and convert a portion of existing liabilities into full ownership of the reorganized company. The plan is also subject to a 45-day “overbid” process, during which other interested parties may submit competing offers.
Marelli was formed in 2019 through the merger of Italian parts maker Magneti Marelli and Japanese supplier Calsonic Kansei. The $6.6 billion transaction saw Magneti Marelli spun off from Fiat Chrysler (now part of Stellantis) and sold to Calsonic Kansei, which had been acquired by KKR.
Recent reports indicated Marelli had explored a potential buyout offer from India’s Motherson Group, but negotiations were reportedly hampered by disagreements between Japanese and foreign creditors.
Despite its financial difficulties, Marelli remains a critical supplier for global automakers. Nissan, one of Marelli’s major clients, acknowledged the company’s efforts to limit disruption.
“We appreciate Marelli’s efforts to minimise operational disruption,” Nissan said in a statement. “We will coordinate with other Marelli customers and monitor the supply chain to prevent disruption.”
Marelli listed both assets and liabilities in the range of $1 billion to $10 billion in its bankruptcy filing. The company is being advised by Kirkland & Ellis, PJT Partners, and Alvarez & Marsal, while its lender group is represented by Akin Gump, Houlihan Lokey, and AlixPartners.
The Wall Street Journal and Reuters contributed to this report.
