Blue Water Automotive Systems Inc. has reached a deal to sell one of its Michigan plants to Engineered Plastic Components Inc.
Judge Marci McIvor of U.S. Bankruptcy Court in Detroit approved the sale Aug. 26, with EPC of Grinnell, Iowa, paying $3 million in cash for equipment at a Blue Water plant in St. Clair, Mich.
Creditor CIT Capital USA Inc. traded $3 million in debt for the facility and real estate as part of the deal, and will lease it to EPC.
The purchase takes in about 30 injection molding presses, including at least two two-shot machines, along with resin-handling equipment, cranes, forklifts, auxiliary equipment and other operating items.
Blue Water entered Chapter 11 protection in February citing debts related to launching new products and a shortfall in financing from a slowing auto market and rising resin costs. It had hoped to restructure its debts and emerge as a standalone company.
By Aug. 12, however, the company told customers it would shut down all of its plants including three in St. Clair by Aug. 29.
The deal with EPC saves one of those plants and an unspecified number of jobs.
EPC President Reza Kargarzadeh said in a statement that the Blue Water acquisition brings it new customers and a greater geographic reach.
``We see our investment in the ... facility as an excellent opportunity to strengthen our position with, and proximity to, major customers in the automotive industry,'' he said.
The plant employed more than 170 earlier this year, but has been scaling back as part of the planned closure.
This deal marks the second time in a year that EPC has stepped in to buy an auto supplier just before it was slated to close.
On Aug. 31, 2007, EPC purchased two plants in Rantoul, Ill., from bankrupt Collins & Aikman Corp., adding those to an earlier acquisition of another C&A plant in Columbia, Mo.