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Delphi bid procedures approved for $9.8 million brake hose business sale
By Caroline Salls
Pittsburgh, Feb. 16 - Delphi Corp. obtained court approval of the bidding procedures for the proposed $9.8 million sale of its brake hose business, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.
Harco Manufacturing Group, LLC is the stalking horse bidder.
The sale hearing is scheduled for March 22.
According to the motion, the final sale of the brake hose business is subject to a waiver of any no-sale clause in any agreements between Delphi and the Steel Workers of America, Local 87L, AFL-CIO/CLC.
Under a manufacturing services agreement, Delphi said it would continue to produce brake hose products for a maximum of 12 months or earlier if the transition of the business line is completed.
Delphi said in the motion that although it believes the brake hose product line is fundamentally strong, the business does not fit within the company's anticipated product portfolio under its transformation plan.
In particular, Delphi said it lacks a global manufacturing presence in this particular product line to grow the business, as well as the fitting capacity and designs for brake hose assemblies in non-General Motors Corp. vehicles.
Harco will pay a $500,000 deposit, and all other bids must also include a $500,000 deposit.
If Harco is not the high bidder, Delphi will pay it a $294,000 break-up fee and up to $100,000 for expense reimbursement.
Initial overbids must be for at least $500,000 more than the purchase price, plus the amount of the break-up fee.
Subsequent bids must be made in increments of $250,000.
Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005. Its Chapter 11 case number is 05-44481.
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