The automotive supplier TMD Friction has resumed production at the individual locations of the Group. Customer orders are being processed on time with their usual high quality.

This has been made possible after Dr. Frank Kebekus, preliminary insolvency administrator for the German companies and Holding of TMD Friction, has engaged the main participants - including customers, suppliers and banks – in discussions, convincing them to continue their cooperation with TMD Friction. “Thus, we were able to set the course for continuation of the Company”, said Dr. Kebekus.

Simultaneously, Dr. Kebekus initiated the search for a new partner together with TMD Management and CEO Derek Whitworth. “So far, we have held several discussions with seriously interested potential financial and strategic long term partners. They are currently examining the Company’s figures and data in a due diligence process”, states the preliminary insolvency administrator. In doing so, potential long term partners will only obtain access to the Company’s data if Management and the preliminary insolvency administrator are convinced that interest is sincere and interested parties have signed extensive confidentiality agreements. “All interested parties will have the same opportunities to check the Company’s economic data as basis for a proposal”, says Dr. Kebekus. Hence, results of the process can be expected earliest during spring of 2009.

The financial adviser Close Brothers has been engaged to support the sell of the Company Group in its entirety to a long term partner with the goal of preserving as many jobs as possible. Together with TMD and the preliminary insolvency administrator they currently even see a small advantage compared to many other automotive suppliers. “In view of the current economic situation of the automotive industry we have the advantage, among other things, that a large part of our business volume is generated from the replacement part market and not from original equipment market. This makes us somewhat more independent from the industry’s current production of new cars”, states Dr. Kebekus.

At the beginning of December 2008, the responsible parties of TMD Friction filed for bankruptcy for the German companies and the Holding at the responsible district court in Cologne, Germany, due to insolvency. Subsequently, the court appointed barrister Dr. Frank Kebekus as preliminary insolvency administrator. Main reason for filing bankruptcy is the current market situation in the automotive industry and the corresponding decline in sales leading to short term liquidity issues at TMD Friction. Business operations – with the exception of Christmas holidays – continue unchanged since bankruptcy has been filed.

About TMD Friction

TMD Friction Group is the world's leading manufacturer of brake friction materials in the original equipment market of the automotive and brake industry. Its product portfolio comprises disc brake pads and drum brake linings for passenger cars and commercial vehicles together with brake pads for racing and friction materials for industry. TMD Friction also supplies the global aftermarket with its Textar, Pagid, Mintex, Don, Cobreq, and Cosid brands. With locations in Germany and six other European countries, the USA, Brazil, Mexico, China, Japan and Malaysia, TMD Friction generated a turnover of 690 million Euros in 2007 and employed 4,500 people worldwide.