Spectra Premium: a second CCAA in six years, and no stalking horse

Since 1989 the Spectra business has designed, manufactured and distributed automotive parts, principally fuel and cooling system components, from Boucherville, Québec. In March 2020 the company that then ran it, Spectra Premium Industries Inc., filed under the CCAA with Ernst & Young Inc. (EY) as monitor. The Superior Court of Québec approved the sale of substantially all of its assets on September 28, 2021, and on November 12, 2021 the business passed to the two companies that are now the debtors, as designees of Turnspire Capital Partners, LLC, a New York private investment firm, per the Application, Sept. 28, 2026, paras. 8 and 21–23.

Those companies, Spectra Premium Mobility Solutions Canada Ltd. and Spectra Premium Mobility Solutions USA, LLC, applied for protection of their own on September 28, 2026, describing the filing as "the second insolvency of the Spectra Premium business in the space of six years, albeit under new ownership and with a materially different capital structure." Nilesh Soni, president and chief executive of both, solemnly declared that, to the best of his knowledge, the application's facts are true (Application, Sept. 28, 2026, paras. 2 and 19 and Affidavit of N. Soni). On September 30, Justice Janet Michelin of the Superior Court of Québec (Commercial Division), district of Longueuil, granted an initial order under the CCAA in court file No. 505-11-019121-263 and an order approving a sale and investment solicitation process. EY is monitor again, and the stay of proceedings runs until October 9, 2026, per the Initial Order, Sept. 30, 2026, paras. 13 and 50 and the SISP Order, Sept. 30, 2026, para. 11.

A plant in Boucherville, a warehouse in Indiana

The group's aftermarket division, about 60% of consolidated revenue, sells replacement fuel pumps, fuel tanks, radiators, condensers and other parts, made in Boucherville or bought from suppliers primarily in Asia, to customers that include O'Reilly Automotive, AutoZone, Walmart and Canadian Tire. The OEM division, which with tooling accounted for about 40% of revenue in 2026 to date, makes steel fuel tanks, tank assemblies and heat exchangers for manufacturers including Ford Motor Company and PACCAR. Of about 350 employees, 287 work at Boucherville, 213 of them represented by the Association des employés de Spectra Premium (C.T.P.S.), and 40 at a leased distribution centre in Greenfield, Indiana (Application, Sept. 28, 2026, paras. 27, 34, 36 and 43–44).

In the application's words, "Despite the fresh start provided by the 2021 Acquisition, which allowed the Spectra Group to leave behind SPI's legacy liabilities and loss-making Swedish and Chinese operations, the Spectra Group has been unable to achieve sustained profitability." Consolidated net sales fell from US$145.2 million in 2023 to US$117.1 million in 2025, the 2025 gross margin was "approximately 1%," and the net loss went from US$2.1 million in 2023 to US$21.2 million in 2025 (Application, Sept. 28, 2026, paras. 93–95).

Among the causes, the applicants list "a shift in customer demand towards lower-priced imported products and excess capacity in the North American market for fuel pumps and cooling products"; U.S. tariffs, since early 2025, on goods imported from China and later on certain goods originating in Canada, which raised the landed cost of what Spectra USA distributes; working capital needs that "proved incompatible with the terms of the financing available"; and fixed costs, the Boucherville rent among them, that stayed largely unchanged as sales fell (Application, Sept. 28, 2026, para. 94). The proposed monitor's report adds that the OEM business "has significantly decreased, with light duty vehicles using fewer metal fuel tanks" (Pre-filing Report, Sept. 29, 2026, para. 13.4). On September 21 the companies owed about US$11.0 million to suppliers and other unsecured trade creditors; as of September 22, 57 of the 71 aftermarket suppliers identified by management, most of them in China, had suspended shipments or refused new purchase orders pending payment of past-due balances, per the Application, Sept. 28, 2026, paras. 40 and 75.

Two agreements, no stalking horse

The defaults the application lists include a fixed charge coverage ratio breach, notified on March 20, 2026 by the syndicate's agent, Wells Fargo Capital Finance Corporation Canada; receivables sales to CaixaBank that "did not qualify as permitted supply chain financing arrangements under the Credit Agreement"; and the credit agreement's maturity on April 30 without the loans being repaid in full (Application, Sept. 28, 2026, paras. 79 and 99).

A May 1 accommodation agreement held off the lenders while the companies pursued a sale of the aftermarket business through Capstone Partners, on milestones calling for signed letters of intent by May 15 and a closing by August 21. Capstone contacted 43 potential buyers, of which "approximately 2" signed non-disclosure agreements, and the process produced two non-binding letters of intent that "were not deemed satisfactory to the Lenders" (Application, Sept. 28, 2026, paras. 105 and 107–108). In the proposed monitor's words, "the sale process took longer than expected and the interest received was below expectations" (Pre-filing Report, Sept. 29, 2026, para. 16).

In the summer a prospective purchaser of all or substantially all of the business emerged from that process. The Investissement Québec loan matured unpaid on July 31. On August 26 the agent demanded repayment and issued notices of intention to enforce security under s. 244 of the BIA, and on August 27 the parties signed a forbearance agreement running to the earlier of September 30 and a further default. Its conditions included a non-binding letter of intent from the prospective purchaser, or another party with demonstrable financial resources, to act as stalking horse by August 31 and a binding stalking horse agreement by September 14, along with undertakings to obtain an initial order by September 30 and take interim financing from the same lenders (Application, Sept. 28, 2026, paras. 99(e) and 109–111). "Nevertheless, Applicants were unable to conclude an agreement with the Potential Buyer to establish a stalking horse bid within the required timeline prior to the filing of these CCAA Proceedings," the application says (Application, Sept. 28, 2026, para. 112).

Who is owed

The syndicate ranks first: Wells Fargo Capital Finance Corporation Canada as agent and lender, with Wells Fargo Bank, National Association and the Canadian Imperial Bank of Commerce, owed C$29,364,175.52 in principal at August 25, 2026, excluding interest, fees and costs, which the companies have acknowledged as "due and owing without defence, set-off or counterclaim." Investissement Québec ranks second, owed C$7,082,129.85 with interest at August 31 on a 7% loan. Third is SPMS Holdings, LLC, the group's ultimate parent, controlled by funds managed by Turnspire, on a subordinated secured note for US$10,032,103 at 1.08%, about US$10.6 million with capitalized interest, per the Application, Sept. 28, 2026, paras. 8(a), 59, 66, 69–70 and 73.

Collections in, advances out

The initial order authorizes the companies to borrow, repay and reborrow up to C$8,000,000 from the syndicate lenders under a term sheet dated September 28, 2026, secured by a C$9,600,000 charge (Initial Order, Sept. 30, 2026, paras. 34 and 37); at the comeback hearing the companies intend to seek C$20,000,000 and a C$24,000,000 charge (Application, Sept. 28, 2026, para. 3(a)(iv) and (b)(iii)). Per the proposed monitor's summary of the term sheet, interest runs at the Canadian base rate plus 8.55% on Canadian-dollar borrowings and the U.S. base rate plus 6.25% on U.S.-dollar borrowings, plus 2% after a default, with a commitment fee of US$150,000 and an exit fee of US$100,000. The proposed monitor calls the economic terms "reasonable and within market parameters for financings of this nature and size" (Pre-filing Report, Sept. 29, 2026, paras. 65–66).