Judge OKs sale of Collins & Aikman unit to Ross
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By David Bailey
CHICAGO, June 5 (Reuters) - A U.S. Bankruptcy Court judge on Tuesday approved the $126.2 million sale of Collins & Aikman Corp.'s CKCRQ.PK soft-trim carpeting and acoustics business to a company led by billionaire financier Wilbur Ross.
A date for completing the sale to the Ross-led International Automotive Components Group's North America business has not been set. IAC previously acquired Collins & Aikman units in Europe and South America, and Lear Corp.'s (LEA.N) automotive interiors businesses.
The sale includes 16 facilities in the United States, Canada and Mexico that produce carpeting, molded flooring, dashboard insulators and other products. The unit has about 4,300 employees and annual revenue of about $615 million.
The deal also gives senior secured pre-petition lenders to Collins & Aikman the right to buy up to 25 percent of the outstanding stock in IAC North America.
IAC, a joint venture of WL Ross & Co LLC, Franklin Mutual Advisers LLC and Lear, will have annual sales of about $5 billion when the acquisition is completed.
Collins & Aikman filed for bankruptcy in May 2005 in the U.S. Bankruptcy Court for the Eastern District of Michigan. It announced last year that it expected to sell its remaining assets instead of emerging as a stand-alone company.
Also on Tuesday, Judge Steven Rhodes granted Collins & Aikman's request to delay a hearing on confirmation of its bankruptcy plan until July 12 to give the company time to wrap up details on asset sales and other issues. The hearing had been scheduled to start Tuesday.
The sale of a significant portion of its plastics business is one unresolved area. Collins & Aikman named Cadence Innovation LLC as lead bidder for nine plastics facilities that produce instrument panels, door panels and center consoles. Those facilities have about 3,500 employees in the United States, Canada and Mexico. Cadence, whose CEO Jerry Mosingo once led Collins & Aikman, is owned by an investor group led by Harbinger Capital Management and Yucaipa companies.
Southfield, Michigan-based Collins & Aikman previously sold three individual plastics facilities in Michigan to different buyers.
Collins & Aikman also is attempting to sell other facilities, but will move toward a controlled wind-down and closing of the plants if it cannot find buyers, working with customers to transfer production to other suppliers.
((Reporting by David Bailey, editing by Brian Moss; firstname.lastname@example.org; Reuters Messaging: email@example.com; +1 312-408-8135)) Keywords: COLLINSAIKMAN BANKRUPTCY/
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