Parker Automotive OKs Restructuring Plan’s Terms

COSTA MESA —  Parker Automotive Corp. said Wednesday that its board of directors had approved the “principal terms” of a restructuring that would include a “significant” cash infusion.

The Costa Mesa-based company, a maker of fuel cleaning systems for automobiles, would not elaborate on the statement as negotiations on the deal continued through the day and into Wednesday evening.

The announcement came two days after a statement was issued by an unidentified investor that negotiations were under way with Parker Automotive for “a significant cash investment in the company.” The statement said the investment was needed to enable the company to continue operations.

Neither Parker Automotive nor a San Francisco public relations firm that issued the statement Monday would identify the investor.

In its terse release Wednesday, Parker Automotive said that the restructuring was subject to several conditions and that there is no assurance that it will occur. It could not be determined if the conditions were the same as those identified Monday.

In the investor’s statement, Eric A. McAfee, Parker Automotive’s chief financial officer, was quoted as saying that the investment would be made only if the majority of the board--including founder Michael E. Parker--resigns, if the company settles much of its debt, and if the investor obtains voting control of Parker’s stock.

Parker resigned late last year as president and chief executive officer because legal problems involving another company he founded were interfering with Parker Automotive’s operations. At one point, creditors of the other company obtained a federal court order placing Parker Automotive in temporary receivership. The receivership has since been lifted.

Parker Automotive lost $2.9 million in the third quarter ended Nov. 30.