DETROIT — Johnson Controls Inc. and a unit of Magna International Inc. picked up the largest portions of bankrupt Plastech Engineered Products Inc. in sales approved by the U.S. Bankruptcy Court.
JCI agreed to pay more than $199 million for Plastech's interiors unit, the largest portion of the bankrupt supplier's business in terms of revenue.
The deals for Plastech's interiors, exteriors and stamping units were approved last week by a judge in Bankruptcy Court in Detroit.
JCI initially had offered $177 million in cash. At a court hearing Wednesday, June 18, Plastech attorney Gregg Galardi said JCI agreed to assume $160 million of Plastech's debt and pay $39.5 million in cash, plus a still unidentified fee for inventories.
The sale also will include Plastech's 23 interiors plants, current inventories, contracts, real estate and property related to the business unit.
A Bankruptcy Court judge also approved the sale of Plastech's exteriors business unit to Decoma International of America Inc. for $24.7 million. Decoma is the exteriors business unit of Canadian supplier Magna.
The exteriors unit generated $200 million to $300 million of Plastech's $1.4 billion revenue base.
Two interiors plants and five exteriors plants will close. Plastech reached an agreement with the UAW to offer severance pay and other benefits to workers there, Galardi said.
Also approved was the purchase of Plastech's stamping business for $4.5 million by JD Norman Ohio Holdings Inc.
Plastech aims to complete the sales of its business units by June 30. The sales are subject to Bankruptcy Court approval.
Plastech, owned by Vietnamese immigrant Julie Brown, filed for Chapter 11 protection Feb. 1 after Chrysler LLC canceled its contracts with the supplier.
The sale of its business units represents the final step toward liquidating the 20-year-old suburban Detroit supplier, which abandoned efforts to reorganize under Chapter 11.
Plastech is the largest minority-owned supplier in the auto industry, with $1.4 billion in revenue in 2007.
Reuters contributed to this report
