By Robert Sherefkin, Automotive News
Detroit, Michigan-German industrialist Helmut Pelzer, who built HP Pelzer Group into a key supplier to DaimlerChrysler on two continents, is preparing to step down amid eleventh-hour talks to sell the company and avoid insolvency.
An unidentified prospective investor is prepared to acquire the shares of the Witten, Germany, company and inject capital, said a Pelzer Group statement released Monday 5 March. In return, the founder is expected to leave the acoustics and interior-trim supplier.
"The above steps will ensure that the life's work of Helmut Pelzer, as well as jobs at the Pelzer Group, are safeguarded," the company's 5 March statement said. "An agreement is expected to be reached shortly."
The Pelzer Group joins a growing list of suppliers being shopped in a troubled global automotive interiors market. They are struggling with excess capacity, rising raw material prices and cutthroat pricing by their customers.
It's unclear what the ownership change in Germany would mean for HP Pelzer's business in North America. A secretary for Mark Confroy, ceo of HP Pelzer Automotive Systems Inc., of Troy, Michigan, said he would not comment beyond the 5 March statement.
The financial news service Debtwire first reported the negotiations. Late last month, Finance magazine, a German publication, reported that Pelzer was forced into a sale after violating bank covenants. The company posted sales last year of about $787 million, based on today's exchange rates.
The eleventh-hour negotiations under way between HP Pelzer and a prospective buyer follow reports of a breakdown over 3-4 March between the Pelzer family and a German private-equity concern, MVB AG. MVB had agreed to acquire a substantial majority of shares in the supplier in December. But the deal collapsed because of resistance by the Pelzer family, said a source and Debtwire.
HP Pelzer's bankers support the new proposal, the company statement said.A 2002 effort by Pelzer to sell his company to Collins & Aikman Corp. foundered. Collins & Aikman had planned to buy its way into a major European presence.
HP Pelzer employs more than 4,000 people at 34 locations in 18 countries in Europe, North America and Asia.
Besides DaimlerChrysler, its other major customers include General Motors, Volkswagen AG, Ford Motor Co. and Honda of America Manufacturing Inc."