MALDEN, Mass. (Nov. 13, 2009)—GPX International Tire Corp. has agreed to sell its solid tire business—including its Hebei Starbright Co. Ltd. tire plant in China—for $10 million to an investors' group that includes GPX “insiders” Bryan, Neil and David Ganz.
The transaction, which is subject to approval by the U.S. Bankruptcy Court for the District of Massachusetts, will include the MITL, ITL and Brawler brands along with GPX's Gorham, Maine, solid tire plant, Red Lion, Pa., wheel plant and the Starbright plant in Hebei, China. Collectively, these operations accounted for sales of $66 million in 2007 and 2008.
The bidders, known collectively as MITL Acquisition Co. L.L.C., also agreed to assume $1.3 million in “designated liabilities,” according to court documents.
Bryan Ganz is an officer, director, shareholder and creditor of Malden-based GPX; Neil Ganz is a shareholder, creditor and employee of GPX; and David Ganz is a creditor and employee of GPX.
GPX—which filed for Chapter 11 bankruptcy protection Oct. 26—said it expects to complete the transaction and the sale of its other tire distribution business units by year-end. Until the sale is finalized, the company will continue to manufacture and distribute tires and service its customers.
MITL Acquisition has deposited $450,000 in an escrow account to secure its bid, the court documents show.
GPX previously agreed to sell its distribution assets in two separate deals. The larger of the two—to Alliance Tire Co. (1992) USA Ltd. for $38.3 million—covers GPX's U.S. and South African operations, customer relationships, warehouse footprint, worldwide rights to the Galaxy and Primex brands and medium radial truck tire distribution business.
The second deal involves the sale of GPX's sales and distribution assets in Canada to a group of investors, led by GPX/Dynamic Tire Corp. executives Robert Sherkin and Peter Koszo. The group offered $23.9 million to acquire GPX's stock interest in Dynamic, an indirect GPX subsidiary based in Brampton, Ontario.