Oxford Automotive Inc. has retained investment banker Goldman Sachs of New York to sell plants to help finance a hefty Mercedes-Benz contract in Alabama, according to a source familiar with the deal.
The Troy, Mich., supplier needs cash to complete its McCala, Ala., plant, where it will produce welded underbodies for two models that go on sale next year: the redesigned Mercedes M class and the Vision Grand Sports Tourer.
Oxford's financial struggle was demonstrated by its recent sale of a new plant in Mexico to Magna International Inc. for less than $40 million - well below its estimated $100 million book value, according to a former Oxford insider.
In 2001 Oxford won a $1.3 billion contract to supply large underbody stampings for Mercedes. But stamping companies have been under intense financial strain for more than a year because of rising steel prices.
In addition to its financial struggles, Oxford's leadership structure has been in disarray. Last month Oxford brought in David Jones as interim CEO to replace John Potter, who retired July 1. Jones is a director with the workout firm Conway MacKenzie & Dunleavy of Birmingham, Mich.
This year CFO Martin Welch unexpectedly left Oxford after the company raised $235 million from a junk bond offering to help raise capital for its Mercedes contract.
He was the sixth CFO to leave the company in seven years.
Oxford ranked No. 85 last year on the Automotive News list of top 150 North American OEM suppliers with 2003 sales of $483 million.