Dana, Centerbridge postpone investment agreement signing to July 23

By Caroline Salls

Pittsburgh, July 20 - Dana Corp. and Centerbridge Capital Partners, LP have extended the deadline to sign their investment agreement to July 23, according to an 8-K filed with the Securities and Exchange Commission.

The agreement was originally supposed to be finalized by July 19.

As previously reported, Appaloosa Management LP said it has a proposal that is "materially superior" to Centerbridge's, arguing that the company's efforts to "pursue a plan sponsored by Centerbridge Capital Partners, LP have been fundamentally flawed and, if continued, will yield far less than the maximum recoveries available to stakeholders."

Appaloosa made its claim in a letter to the company's board and included it in a schedule 13D filed Thursday with the SEC.

According to Appaloosa, Dana's proposed transaction with Centerbridge and the various unions is structured "to effectively preclude competing proposals."

In comparing the two proposals, Appaloosa said its proposal is "materially superior" to Centerbridge's because it appropriately values the company. In addition, the proposal gives creditors full recovery on their claims while providing a "meaningful" return to shareholders.

Appaloosa said its proposal also "ensures that management will be accountable to stakeholders on a going-forward basis."

Also as previously reported, Dana reached a series of interrelated union and investment agreements with the United Auto Workers, United Steel Workers and Centerbridge Capital Partners, LP to reduce the company's operating costs as it emerges from bankruptcy.

The agreements are expected to lower Dana's labor costs and replace the company's health care and long-term disability obligations for retirees and employees represented by these unions with Voluntary Employees' Beneficiary Association trusts funded in part by Dana.

Under the investment agreement, Centerbridge will purchase up to $500 million of convertible preferred stock of the reorganized Dana. In addition, it will facilitate an additional investment of up to $250 million in convertible preferred stock.

Dana, a Toledo, Ohio-based supplier of components, modules and systems to vehicle manufacturers and related aftermarkets, filed for bankruptcy on March 3, 2006 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 06-10354.

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