Elco Holdings Ltd. (TASE: ELCO) will buy the residential heating, ventilating and air conditioning (HVAC) business of US air-conditioner manufacturer Fedders North America Inc., which is Chapter 11 bankruptcy proceedings, for $13.25 million. Elco will buy the business through its Airwell Inc. subsidiary.
US Bankruptcy Court District of Delaware Judge Kevin Shannon approved the sale on Thursday.
Elco will buy three Fedders' brands, including inventory: Fedders, Air Temp, and Emerson Quiet Kool. Airwell's Chinese subsidiary, Electra Air Conditioning (Shenzhen) Co. Ltd. will also buy Fedders' Chinese activity for $3.6 million This activity includes the R&D center, product licenses, which stipulate that the products comply with US standards.
Elco said that the acquisition of the Fedders' activities was part of the company's strategy to penetrate the North American air conditioning market by using known brands and to expand its product lines of air conditioners
Fedders filed for Chapter 11 in August 2007 and said if it did not a buyer for the US HVAC business, the company would have to shut it down due to liquidity issues. US media reports cite creditors as saying that asset sales will fall far short of what the company needs to pay off its debts.
Published by Globes [online], Israel business news - www.globes-online.com - on March 16, 2008
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