Collins & Aikman deal “may be called off”: report
Canadian PlasticsCanadian Plastics
A deal that would see Mich.-based auto supplier Cadence Innovation LLC purchase a significant portion of bankrupt C...
A deal that would see Mich.-based auto supplier Cadence Innovation LLC purchase a significant portion of bankrupt Collins & Aikman‘s (C&A) plastics assets may be in jeopardy, according to a report in the Financial Times.
The original letter of intent (LOI) between the two companies included nine facilities in the U.S., Ontario and Mexico, employing a total of 3,500 people.
Citing two unnamed sources familiar with the negotiations, the Times said the deal was at risk of falling through. C&A reportedly sold a highly coveted plant in Hermosillo, Mexico plant, one of the nine facilities included in the original LOI.
“[Hermosillo] was a plant that [Cadence] really wanted, in particular because they want to broaden their business book with Ford,” said a source quoted in the report.
According to the Times, the hearing on the sale has been delayed due to ongoing negotiations.
The two companies signed the LOI in April 2007, and C&A’s chief restructuring officer John Boken noted that the sale would “preserve a significant number of jobs, generate important recoveries for our creditors and represent a significant step toward confirmation of our Chapter 11 plan.”
Cadence is a relatively new company, with 17 facilities in the U.S., Hungary and the Czech Republic.
Representatives at the companies could not be reached for comment.