LDM Technologies Inc. is set to buy injection molder Soo Plastics Inc. out of Chapter 11 bankruptcy protection for $8.5 million.
A hearing on the auction is set for Dec. 19 in U.S. Bankruptcy Court in Detroit. LDM is set to take over all assets and contracts, according to a Dec. 9 court filing.
If finalized, the purchase will mark another step in a turnaround for Auburn Hills, Mich.-based LDM, which posted a $1.8 million profit for its 2001-02 fiscal year, ended Sept. 29. That was LDM's first year in the black since 1997.
LDM listed $390.9 million in sales for the year, slightly better than the $390.2 million it recorded for the previous year.
The company ended fiscal 2001 with $9.4 million in losses, in part the result of start-up costs for a new bumper fascia molding plant in Romulus, Mich., that was left idle because of a delayed vehicle launch by LDM's customer.
LDM invested $9 million at the Romulus site through fiscal 2001. It invested another $14.6 million in rent and employee training this year, but also saw the start of revenue coming into the plant when its customer began production in March, the company said in its annual report to the Securities and Exchange Commission.
The company also named new leadership this fiscal year, bringing in Alan C. Johnson as president and chief executive officer in December 2001. Johnson is a former executive with Federal-Mogul Corp. and Exide Corp.
The Soo Plastics deal will mark the second bankruptcy purchase for LDM this year. In May it bought the assets of Security Plastics Inc.'s plant in McAllen, Texas, from Chapter 11. That plant injection molds seat-belt-system components. LDM paid $3.8 million for the buyout, for a plant with $12 million to $15 million in annual sales.
Soo Plastics, based in Sault Ste. Marie, Mich., filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in September, listing about $16 million in assets and up to $18 million in debts. Soo has about $25 million in annual sales, with General Motors Corp. as its largest customer. GM also has provided the financing needed to continue operations throughout the bankruptcy proceedings.