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Northstar Aerospace seeks creditor protection


Northstar Aerospace (TSE:NAS) Thursday sought protection from creditors in the U.S. and Canada, as the aircraft parts maker put itself up for sale.

Northstar, whose customers include the U.S. government, Sikorsky and Agusta Westland, said it has entered into a "stalking horse" agreement with Wynnchurch Capital to sell its assets for about $70 million.

A stalking horse is a bidder chosen by a bankrupt company from a pool of potential bidders to make the first bid for its assets.

Northstar, however, said if it does not get a better offer, it will be unable to pay even its secured creditors.

While the company's U.S. unit filed for Chapter 11 bankruptcy protection in a Delaware court, its Canadian unit will seek creditor protection under the Companies' Creditors Arrangement Act for an initial period of 30 days.

Northstar had raised going concern doubts in September 2011.

Northstar said it will receive financing of up to $4 million during the CCAA and Chapter 11 proceedings from its lenders. The company has already received $7 million in financing from Boeing Capital Loan Corp.

The company's directors have decided to resign following the bankruptcy protection filing.

Northstar, which provides gears for Black Hawk helicopters and Rolls-Royce's Trent engines, listed assets of up to $50,000 and liabilities of between $50 million and $100 million.

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