By Stephanie Gleason
Detroit-based American Axle & Manufacturing Inc. (AXL) will
lead bidding during an auction Thursday for Revstone Industries
LLC's aluminum forging business with a $2.5 million offer.
Revstone named American Axle its lead bidder, or stalking horse,
in court documents filed Sunday. A stalking horse bidder is named
to set a baseline purchase price at auction, meant to encourage
better offers. In return for this service, a stalking-horse bidder
is often entitled to a breakup fee if it isn't the successful
purchaser of the assets.
American Axle is set to collect a $75,000 breakup fee if it
doesn't win the auction for Revstone's aluminum forging business.
Competing bidders must offer at least $100,000 more than American
Axle's $2.5 million bid and cover the breakup fee.
On the auction block Thursday is Revstone's Greenwood Forgings,
an aluminum forging business that lost most of its customers and
idled its plant at the end of March. Greenwood designs and
manufactures forgings for the automotive and power-sports markets
and had $13.6 million in revenue for 2011.
Judge Brendan L. Shannon of the U.S. Bankruptcy Court in
Wilmington, Del., is scheduled to review the auction results at a
May 28 sale hearing.
Revstone, which filed for Chapter 11 protection last December,
employs 2,400 people at 39 facilities across the U.S., Central
America and Asia, manufacturing metals, tooling and
high-performance products for automotive and other industrial
sectors.
During the case, creditors, including General Motors Co. (GM)
and the U.S. Department of Labor, have argued that mismanagement,
including by owner George Hofmeister, landed the company in
bankruptcy and have requested that a trustee administer the case
going forward.
The Lexington, Ky., company was acquired in 2008 by Mr.
Hofmeister, according to court documents. Although the company was
purchased at a historically low valuation, the recession has had a
lasting impact on the business, keeping liquidity tight, it
said.
American Axle manufactures car parts for vehicles ranging from
passenger cars to commercial vehicles. It employs more than 10,000
people at 30 locations in 13 countries.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection. Go to
http://dbr.dowjones.com)
Write to Stephanie Gleason at stephanie.gleason@dowjones.com
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