American Axle & Manufacturing Inc. placed the “stalking horse” bid in the auction for Revstone Industries LLC’s Greenwood Forgings subsidiary, in Greenwood, SC. The $2.5-million offer is higher than the amount that Revstone reportedly was seeking when it made the automotive forging operation available for sale.
Other bidders will have to top the initial bid in order to win the auction, but American Axle would be due for a break-up fee reported to be $75,000 if another company is awarded Greenwood Forgings.
Revstone Industries filed for creditor protection in December 2012, and is proceeding with its own reorganization. Recently, the federal bankruptcy report granted Revstone a two-month extension of its exclusive right to implement a reorganization plan, above the objections of creditors.
Creditors have a separate request waiting the court’s ruling, seeking a trustee to direct Revstone’s reorganization process.
Greenwood Forgings filed its own bankruptcy claim in January, stating it faced “severe liquidity constraints.”
Revstone Industries bought the onetime Kaiser Aluminum plant in 2010. The plant has hot and cold forging and impression die forging capabilities, formerly producing automotive suspension, drivetrain, fuel system, and climate-control applications. The plant was idled in mid March and has been closed since March 30, according to published reports.
By contrast, American Axle earlier this month reported first-quarter 2013 profit of $104.3 million, or 13.8% of its $755.6 million Q1 sales. In recent years AAM has been scaling back its domestic operation, though in February it outlined plans to invest more than $100 million in its Michigan plants.
The federal bankruptcy court will review the Greenwood Forgings bids and announce the auction results in a hearing May 28.
