Spanish auto supplier Corporacion Gestamp will buy Oxford Automotive's US plant in Alabama.
Oxford of Troy, Michigan, USA, is breaking apart. The manufacturer of stamped and welded metal assemblies also is trying to sell its US plants in Indiana and Michigan to another buyer but it plans to keep its European operations.
Oxford posted revenues of about $1.1 billion (currently about E832 million) in its fiscal 2003.
CEO David Treadwell confirmed last week that Gestamp of Madrid, Spain, will buy Oxford's $100 million plant in McCalla, which supplies Mercedes-Benz's plant 28km away in Vance, Alabama.
If the deal closes, it would be Gestamp's first US plant.
Gestamp is one of Spain's largest private companies.
The steel- and metal-stamping company is owned by the Riberas family and reported 2003 revenue of E2.1 billion.
Treadwell wouldn't reveal the sale price.
The McCalla plant is seen as Oxford's best US asset because it's new, fully equipped and has a
$1.3 billion contract with Mercedes.
But the plant also was expensive. Oxford spent more than it expected to launch the 382,000-square-foot factory while carrying a large debt load.
"This allows us to pay down a significant portion of our debt," Treadwell said. "Frankly, because of our capital situation, it makes sense."
Oxford wants to keep its Euro-pean operations.
They account for about $650 million in annual revenue, 60 percent of Oxford's total revenue, Treadwell said.
The plants in France, Italy and Germany produce parts for leading European car models and the business doesn't have as much debt as the US operation.
Treadwell said he's been working with the company bondholders and they support the plan. Oxford has $280 million of bond debt.
MatlinPatterson bought majority control of Oxford when the supplier emerged from Chapter 11 bankruptcy in July 2002.
It wound up with a 95 percent interest in 2003 after injecting $75 million into the company, bringing its investment to $200 million.