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Indian company shatters Stolzle's glass purchase
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Indian glassmaker Gujarat Glass Ltd. managed to pry away the Flat River Glass factory from Austrian glassmaker Stolzle-Oberglas after a Bankruptcy Court judge reversed an earlier sale decision and instead granted sale of the Park Hills factory to Gujarat.
Last week, Bankruptcy Judge Peter Walsh approved Stolzle's purchase of the Park Hills factory and two glass-coating plants in New Jersey for $12 million and $2.1 million of assumed liabilities despite a last-minute bid by Gujarat.
Opposition from the unions representing workers at the plants swayed the Wilmington, Del.-based judge to reject Gujarat's bid of $16 million cash and $2.1 million of assumed liabilities.
The United Steelworkers of America argued that Gujarat hadn't given the union sufficient time to negotiate a new labor contract. The Glass, Molders, Pottery, Plastics & Allied Workers International Union also worried that these jobs might be shifted overseas. Gujarat has two glass plants in northwestern India and one in Sri Lanka.
Unsecured creditors asked the judge to reconsider the decision, saying he should have considered the Indian company's offer to be the highest and best bid despite the unions' opposition.
On Friday, Judge Walsh decided he would approve the Gujarat bid, forcing Stolzle to step aside. The Austrian company now gets approximately $423,000 as a breakup fee for losing the deal.
Gujarat's lawyer didn't return phone calls seeking comment on its plans for the plants.
However, Gujarat told the Steelworkers that the company planned to invest about $5 million to $7 million in the Park Hills plant over the next few years, which would help secure the jobs.
"They told us unequivocally that they intend to operate these plants and that they're very interested in establishing a (manufacturing) presence in North America," Steelworkers District 11 Director David Foster said in a telephone interview.
Stolzle had previously told Steelworkers it would invest $9 million in the Flat River Glass plant.
Based in Mumbai, Gujarat Glass is part of Indian holding company Piramal Group Ltd.
Gujarat posted annual revenue of approximately $100 million in fiscal 2004, roughly a fifth of Piramal's revenue that year, according to court filings.
Ahead of Friday's hearing, the Steelworkers and the Glass, Molders and Pottery Workers negotiated separate labor contracts with Gujarat in the event the Stolzle bid failed.
Wednesday, the Steelworkers at Flat River Glass will vote on the proposed contract with Gujarat. The deal provides for better pay and lower health care costs than found in the Stolzle labor deal approved last month.
If Steelworkers reject the new contract, Gujarat will assume the existing labor contract that the union has with the Glass Group.
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October 17th, 2005
Source: Stltoday.com |
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