Oxford Automotive will sell plants to help finance a hefty Mercedes-Benz contract, according to a source familiar with the deal.
The US supplier needs cash to complete its plant in McCala, Alabama, USA, where it will produce welded underbodies for the redesigned Mercedes
M class SUV and the Vision Grand Sports Tourer. Both models go on sale next year.
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.
Oxford's financial struggle was demonstrated by its recent sale of a new plant in Mexico to Magna International for less than $40 million (about E33 million at current exchange rates) -- well below its estimated $100 million book value, according to a former Oxford insider.