TROY, MI — Oxford Automotive on Tuesday, Dec. 7, placed its North American units into Chapter 11 and plans to reorganize around its European operations.
A source said Oxford’s bondholders struck a deal with the company under which they would receive much of the stock of the reorganized company.
The Troy, Mich.-based auto parts maker filed in the U.S. Bankruptcy Court for the Eastern District of Michigan in Detroit.
In conjunction with the filing, Oxford announced the sale of its MacCalla, Ala., plant to Madrid’s Gestamp Corp. for roughly $100 million, according to that source.
The MacCalla plant would have been integral to Oxford’s U.S. operations after the company landed a $1.3 billion contract with DaimlerChrysler AG to make parts for Mercedes-Benz autos there.
But the facility proved to be major financial headache due to its high startup costs.
Controlling shareholder, MatlinPatterson LLC, injected $75 million into Oxford in November 2003 to help it complete the factory.
But just months later, MatlinPatterson brought in Goldman, Sachs & Co. to help sell assets and recoup the $200 million the fund put into Oxford since its exit from bankruptcy in July 2002, the source said.
Oxford said it’s in talks to sell its plants in Corydon and Greencastle, Ind., Lapeer and Prudenville, Mich., and Canton, Miss. In November, the company closed down its Alma, Mich., plant.
The source said Oxford received $7 million to $8 million in debtor-in-possession financing from a group of its bondholders.
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