June 13, 2007 -- According to a Dow Jones Newswire report, Collins & Aikman has initiated actions to sell its automotive exterior plastics components business to Flex-N-Gate. U.S. Bankruptcy Court approval will be necessary for the US$10.4-million deal to proceed. The sale will include U.S. facilities in Evart, Michigan and Belvidere, Illinois, and some equipment from Collins & Aikman’s St.Louis plant. Flex-N-Gate has also agreed to buy a facility in Ontario (Canada). Total employment at the facilities concerned is put at 750.Significance: The sale of the exterior plastics business is in line with bankrupt Collins & Aikman’s current asset-disposal strategy. The company recently won approval for the sale of its soft-trim business to International Automotive Components Group North America and is looking to complete the sale of the majority of its North American plastics business to Cadence Innovation.
The difference with the sale of the exterior plastics business is that Collins & Aikman is seeking to circumvent the normal auction process for such assets, as Flex-N-Gate has already secured new contracts from DaimlerChrysler and a protracted sale process could jeopardise this business.
Source: Global Insight Daily Analysis
Source: Factiva
