Delphi agrees to sell Mexican plant, moves bankruptcy court

Mumbai: Delphi Corporation has announced an asset sale and purchase agreement between two of its subsidiaries and Robert Bosch LLC and its affiliate Frenados Mexicanos, S.A. de C.V., for the sale of their brake components business, including a manufacturing plant in Saltillo, Mexico.

The company also filed a motion with the US bankruptcy court for the southern district of New York to request a hearing on the bidding procedures on June 26.

On completion of the bidding procedure process, a final sale hearing is anticipated to be set for July 19, 2007. The final sale of the plant is subject to the approval of the US bankruptcy court.

As outlined in the court filing, pursuant to the procedures outlined in the bankruptcy code, the $15 million asset sale and purchase agreement between Delphi and Bosch includes: purchase of land, transfer of facility lease, machinery and equipment, assignment and assumption of certain contracts, etc.

Delphi, which filed for bankruptcy in October 2005, long ago opted to pursue a $3.4 billion equity plan from a group led by Appaloosa and Cerberus Capital Management that would take a controlling stake in the parts supplier, although Delphi has said Cerberus is expected to depart from the group.

But Highland, a hedge fund whose $4.7 billion plan was rebuffed earlier this year, said in a filing that it met with Delphi and GM and signed a nondisclosure agreement to evaluate a possible transaction with Delphi, where Highland would be the lead investor.

Highland, which has called the current equity plan a "sweetheart deal" for its investors, had renewed requests for meetings with Delphi in April with the intention of exploring a possible alternative to the Cerberus-Appaloosa plan.

Delphi is one of the top auto parts suppliers globally and could have annual sales of about $21.2 billion once it completes the sales of some business units.