The federal bankruptcy court overseeing the reorganization of Contech L.L.C. is studying a petition to sell the group’s six metalcasting operations to a private-equity group. Revstone Industries L.L.C. has offered a reported $14 million for the operations, in what is said to be the only bid that exceeds the plants’ liquidation value.
Michigan-based Contech filed for Chapter 11 bankruptcy on January 30. The group is a division of Marathon Automotive Group. Marathon acquired Contech from SPX Corp. for $146 million in March 2007. It produces and machines aluminum and magnesium diecastings, steel forgings, and fabricates tubular steel products.
Contech’s diecastings are supplied to manufacturers of power steering, driveline, powertrain, body, steering column, and suspension systems.
In April Contech issued a Worker Adjustment and Retraining Notification Act (WARN) notice to workers at its Albemarle, NC, steel forging operation, indicating it will cease production there in August. A steel tubular products plant in Walled Lake, MI, was offered for sale to Industrial Opportunity Partners L.L.C. for $2 million, but that plant is now marked for closing, according to court documents.
Contech’s six diecasting plants — in Alma, Dowagiac, and Portage, MI; Auburn, IN; and Clarksville, TN — have been offered for sale since March. The company has indicated to the court that it will review additional offers for the plants, but it does not plan an open auction.
Revstone Industries proposes to continue operating them and would assume some Contech liabilities. Also, it would take over some Contech contracts for other automotive manufacturers and suppliers, including American Axle & Manufacturing, BMW Manufacturing, BorgWarner, Delphi Corp., SPX Hydraulic Technologies, and ZF Steering Systems L.L.C., according to reports citing bankruptcy court documents.
Contech also is looking to divest Contech Operating U.K. Ltd., in Welshpool, Wales, to Hicorp Ltd. for about $4 million. The Chapter 11 bankruptcy filing does not cover Contech U.K.
Contech Seeks Court OK to Sell Diecasting Plants
Private-equity group would continue six operations