Delphi granted court OK to sell 50% equity interest in Chinese joint venture

By Caroline Salls

Pittsburgh, March 17 - Delphi Corp. unit Delphi Electronics (Holding) LLC obtained court approval to sell its 50% equity interest in joint venture Shanghai Delco Electronics & Instrumentation Co. Ltd. (SDE) for $7.5 million to its joint venture partner, Shanghai Agriculture, Industry & Commerce Group, Changjiang General Corp. and Changjiang's senior manager Yang Yi, according to a Friday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, SDE produces instrument clusters for automobiles, and Delphi Electronics has de-emphasized its focus on the instrument clusters product line as part of its ongoing product portfolio process.

The transaction will allow Delphi Electronics to exit the SDE joint venture at a time when it is limiting its investment in cluster technology and competing global automotive component suppliers have entered the Asian region.

Under the purchase agreement, the buyers will pay half of the purchase price at closing, 40% within one year of closing and the final 10% payment within two years of closing.

Changjiang will acquire 45% of the equity interest in SDE from Delphi Electronics for $6.75 million. Yang Yi will acquire the other 5% for $750,000.

The company said it expects the transaction to close by June.

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

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