June 18, 2007 -- Delphi Corp. said two of its units agreed to sell their brake component businesses for $15 million, subject to higher offers at a bankruptcy auction. The auto-parts maker, which has been in bankruptcy protection since October 2005, said its units agreed to sell the businesses, including a manufacturing plant in Saltillo, Mexico, to Robert Bosch LLC and its affiliate Frenados Mexicanos SA de CV.
Delphi asked the U.S. Bankruptcy Court in Manhattan to consider the proposed auction rules at a June 26 hearing. The company said it expects to hold an auction on July 17, followed by a final sale hearing on July 19. The deal includes a $450,000 breakup fee for Bosch if it's not the winning bidder at auction.
According to court papers, Delphi's Mexico brake plant business began in 1999 to supply certain products for General Motors Corp.'s (GM) GMT 800 full-sized truck and sport utility vehicles manufactured at the GM vehicle assembly plant in Silao, Mexico. Delphi said the GMT 800 vehicles account for a "significant majority" of the plant's revenue.
The company identified the brake business as a noncore product line that doesn't fit into it's "future strategic framework," and decided to search for a buyer for the Mexico plant. After Delphi announced it would sell the plant, Bosch was selected by GM to supply all of the GMT 900 light-duty brake components made by the Mexico brake plant business. Delphi said it contacted multiple potential buyers, but "Bosch expressed the most interest in purchasing the Mexico brake plant business and offered the most value."
Source: Dow Jones Corporate Filings Alert
Source: Factiva
