Delphi Signs Sale Agreement for Catalyst Business; Files Motion to Request Hearing With Bankruptcy Court
TROY, Mich. - Delphi Corporation (PINKSHEETS: DPHIQ) and certain of its affiliates (collectively, “Delphi”) has entered into a sale and purchase agreement with Belgium-based Umicore for the sale of its global OE and aftermarket catalyst business, Delphi officials announced today. As part of Delphi’s transformation plan, which was announced on March 31, 2006, Delphi identified the catalyst business as a non-core business line that would be better positioned within another firm. Subject to the terms and conditions of the agreement, the aggregate purchase price for the assets related to the catalyst business is $55.6 million, subject to adjustments. As required under the U.S. Bankruptcy Code, Delphi filed a motion today with the U.S. Bankruptcy Court for the Southern District of New York requesting a hearing on June 26, 2007, to approve bidding procedures, and a hearing on August 16, 2007, to approve the sale of assets.
Following the completion of the bidding procedures process, including a potential competitive auction, the sale is subject to court approval and other closing conditions, such as certain competition approvals, completion of consultation procedures with certain unions and works councils, and completion of the closing documents. Delphi anticipates the sale closing during the third quarter of 2007.
As outlined in the motion filed with the U.S. Bankruptcy Court, under the sale and purchase agreement between Delphi and Umicore, Umicore will acquire substantially all of the following assets:
Machinery and working capital;
Related technology and intellectual property;
Manufacturing facilities in Tulsa, Okla.; Florange, France; Port Elizabeth, South Africa; and certain licensing agreements (with Varroc Ltd.) for the Indian market for two- and three-wheeled vehicles;
In connection with the sale, Umicore will also hire certain employees of the catalyst business it acquires from Delphi;
In addition, Delphi and Umicore will enter into component supply agreements, and transitional toll manufacturing and/or service arrangements for operations in Shanghai, China; Clayton, Australia; San Luis Potosi, Mexico; the Flint Technical Center in Flint, Michigan; and the Luxembourg Technical Center in Bascharage, Luxembourg.
Delphi will carefully manage the transition of the business and the sale will be completed in coordination with Delphi’s customers, employees, unions and other stakeholders.
The catalyst, which includes a ceramic substrate coated with precious metals, is located inside a catalytic converter. The catalytic converter facilitates the chemical reactions that change engine exhaust emissions (primarily hydrocarbons, carbon monoxide and oxides of nitrogen), collected in the exhaust manifold, into water vapor, carbon dioxide and nitrogen. Catalytic converters make vehicles more environmentally friendly and help meet tailpipe emissions requirements.
Although the company is selling its catalyst business, it will continue to provide full engine management systems (EMS), including air and fuel management, combustion and valvetrain technology, and exhaust systems technology through its gas EMS product business unit. More information on this agreement and the court filing is available at www.delphidocket.com.
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