PLYMOUTH, Mich. – Metaldyne Corp. has reported that the auction of substantially all of its assets concluded last week with MD Investors Corp. being named the successful bidder after having submitted the highest and best bid.

Metaldyne also had a hearing at which it sought approval of the sale from the U.S. Bankruptcy Court for the Southern District of New York. A favorable ruling from the court is anticipated this week. The sale would involve Metaldyne’s powertrain, balance shaft module, tubular products and chassis assets to MD Investors.

MD Investors is a new company formed by a coalition of Metaldyne’s existing term lenders led by The Carlyle Group, a well-respected private equity firm, and Solus Alternative Asset Management LP, an SEC-registered investment adviser.

MD Investors has agreed to purchase most of the company’s assets under a 363 sale. Under U.S. bankruptcy law, a 363 sale allows a sale of assets on a going concern basis prior to confirmation of a plan of reorganization where a good business reason exists. The sale is the result of a process commenced after the filing by Metaldyne and its U.S. subsidiaries of voluntary petitions under Chapter 11 of the U.S. Bankruptcy Code on May 27.

Under the terms of the parties’ asset purchase agreement, MD Investors will purchase the following assets:

· All of Metaldyne’s Sintered Products, European Forgings and Vibration Controls Products operations located in Europe, Asia, Brazil, Mexico and the United States;

· Plants in Bluffton, Ind.; Litchfield, Mich., and, subject to certain conditions, Twinsburg, Ohio;

· Metaldyne’s balance shaft module operations, which are located at Metaldyne’s plants in Fremont, Ind., and Pyeongtaek, Korea;

· Metaldyne’s tubular products operations housed at Metaldyne’s Hamburg, Mich., plant, which produces fabricated exhaust manifolds and other tube-formed products; and

· Metaldyne’s’ chassis operations in Edon, Ohio; Barcelona, Spain, Iztapalapa, Mexico, and subject to certain conditions, operations in Greensboro, N.C.

“We are very pleased Carlyle, Solus and a group of our term lenders have agreed to purchase substantially all of Metaldyne’s businesses,” said Thomas Amato, chairman, president and CEO of Metaldyne. “It has always been our plan to divest our better-performing operations in connection with our overall Chapter 11 restructuring. We believe the sale of these businesses as a going concern represents the best way to continue to serve our customers and preserve as many jobs as possible.

“We are also pleased Metaldyne is moving through the bankruptcy process swiftly and on plan. The highly competitive sale process in this challenging market is a testament to the strength of our businesses, technology and the commitment of our employees.”

Under the purchase agreement, MD Investors is purchasing the assets with a combination of cash, assumption of liabilities, a “credit bid” and other forms of valuable consideration. In particular, MD Investors is paying approximately $40 million in cash, assuming certain liabilities, including certain obligations to Metaldyne’s suppliers, and is credit bidding more than $400 million of secured term debt. MD Investors has also agreed to provide various other forms of valuable consideration to unsecured creditors.

The proposed sale transaction has the support of virtually all of Metaldyne’s stakeholders, including customers, other secured lenders, the committee of unsecured creditors and, of course, employees. Metaldyne hopes to consummate the sale in the upcoming weeks.

Metaldyne and its U.S. subsidiaries filed for bankruptcy primarily as a result of liquidity, excess leverage and pension and lease costs compounded by the unusually low production volumes in the North American automotive industry. The filing did not include the company’s non-U.S. entities or operations. Metaldyne has a $19.85 million debtor-in-possession (DIP) facility in place with agent bank Deutsche Bank AG, New York, funded by certain of Metaldyne's OEM customers.