TROY, Michigan (AP) — Auto suppler Delphi Corp. has agreed to sell its $2.5 billion (euro1.7 billion) global steering and halfshaft business to a Los Angeles-based private equity group.
Delphi would get approximately $447 million (euro304.6 million) from the sale to Steering Solutions Corp., a unit of Platinum Equity LLC, according to documents filed Tuesday with the U.S. Securities and Exchange Commission. That includes $190 million (euro129.47 million) from Platinum for restructuring costs and $257 million (euro175.13 million) from General Motors Corp., Delphi's former parent and largest customer. GM also would be responsible for up to $65 million (euro44.29 million) in other obligations, including separation-related costs.
''Although the company believes that the steering business is fundamentally strong, the steering business does not fit within the company's anticipated product portfolio under its transformation plan,'' Delphi said in the filing.
The steering business operates 22 manufacturing plants in 15 locations worldwide. It also has five regional systems engineering centers and 11 local customer support centers. It employs 9,700 people, more than half of them based in the United States.
Delphi filed for bankruptcy protection in 2005. As part of the Delphi's bankruptcy agreement, the company must submit the proposal for approval by the bankruptcy court. The company must also review any binding bids from other parties and accept the one deemed highest by the court. Delphi expects to gain approval for the Platinum bid in February.
Since its founding in 1995, Platinum has acquired more than 75 businesses and has more than $23 billion (euro15.67 billion) in annual revenue.
