Delphi to set up two U.S.-based entities related to its steering business sale

By Reshmi Basu

New York, Oct. 25 - Delphi Corp. received court approval Thursday to set up two entities based in the United States, which it says is necessary in order for the company to divest its steering business.

The company said that if the steering business is sold to a third party, the buyer would need certain permits to continue manufacturing in Mexico.

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.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 05-44481.

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