Nexteer launches initial public stock offering (IPO) in Hong Kong

Article by Anita Panait, on June 15, 2013

Nexteer Automotive Group Ltd. has launched an initial public stock offering valued up to $325 million in Hong Kong. According to a term sheet of the transaction seen by Reuters, Nexteer is offering around 720 million new shares in the IPO, which is set to be priced on June 26, 2013. The listing on the Hong Kong stock exchange is set slated for July 3.

Reports on the company’s plan to hold an IPO first surfaced in March 2013, when Nexteer was said to be aiming to raise around $500 million. A report published two weeks ago said the targeted amount was at $400 million.

Nexteer was originally part of Delphi Corp.'s spinoff from General Motors in 1999. However, the company went back to GM after Delphi succumbed to Chapter 11 bankruptcy. GM sold Nexteer in 2010 to Pacific Century Motors, a firm backed by the Beijing municipal government. China’s largest aerospace company, Aviation Industry Corp., currently owns 51 percent of Nexteer through unit AVIC Automobile Industry Holding Co.

Headquartered in Auburn Hills, Michigan, Nexteer Automotive is an automotive parts supplier specializing in the manufacture of steering and driveline products. Its original predecessor was Jackson, Wilcox and Church, founded more than 100 years ago in 1906 and selling the so-called Jacox gear. Buick purchased Jackson, Wilcox and Church in 1909 and transferred its ownership parent General Motors as the Jackson, Church and Wilcox Division.

The Jackson, Church and Wilcox Division was renamed as Saginaw Product Company in 1919 and as Saginaw Steering Gear Division in 1928. Two years lated in 1930, Jacox trade name was changed to Saginaw. The division from renamed in 1985 to as the Saginaw Division, which was then grouped with other GM component units into Automotive Components Group. This Automotive Components Group was spun off from GM into Delphi Automotive and the Saginaw Division was renamed Delphi Steering.

Delphi then filed for Chapter 11 bankruptcy protection on October 10, 2005.This lengthy bankruptcy proceeding saw GM through subsidiary GM Global Steering Holdings LLC, purchased Delphi Steering in 2009. Delphi Steering was then renamed as Nexteer Automotive. Following agreements with union, GM moved to prepare Nexteer for sale, since the company Nexteer had multiple customers besides the carmaker.

In November 2009, the Michigan Economic Growth Authority provided a $70.7 million state tax credit over 10 years to Nexteer, which announced in December 2009 plans to invest $400 million across the board. GM sold Nexteer to Pacific Century Motors on November, 2010 and the Nexteer was broken up into two separate companies.

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