Delphi looks to set up two U.S.-based entities in connection with its steering business sale

By Reshmi Basu

New York, Oct. 16 - Delphi Corp. wants to set up two entities based in the United States, which it said are needed to entice buyers as the company looks to divest its steering business, according to a Tuesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

Delphi has been marketing the business, but is yet to have reached a deal with a potential buyer.

However, the company said that in the event that the unit is sold to a third party, the buyer would need certain permits to continue manufacturing in Mexico.

Subject to court approval, Delphi and its subsidiary, DAS LLC, plan to form a Mexican unit that would hold the permits while the potential buyer would buy stock in that entity.

However, Mexican law requires that the Mexican unit must have at least two shareholders in order to operate in the country.

Delphi would create the two new U.S.-based entities to serve as shareholders of the Mexican unit. Furthermore, the entities would not file for Chapter 11 protection.

"Indeed, the key advantage behind this transaction is the seamless transition of the steering business, to the extent sold, to a third party purchaser," Delphi said in the motion.

A hearing is scheduled for Oct. 25.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005. Its Chapter 11 case number is 05-44481.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.