22-03-2007 Dana
Corporation announced today that its subsidiary, Dana Mauritius Ltd., and Dongfeng
Motor Co. Ltd. have amended the agreement to develop their 50/50 joint venture,
Dongfeng Dana Axle Co. Ltd. Certain terms of the original agreement with Dongfeng
signed on March 10, 2005, were renegotiated after Dana filed for reorganization
under Chapter 11 of the United States Bankruptcy Code in March 2006. Under
the amendments and other agreements signed by both companies - and subject to
certain government approvals, Dana Mauritius will make an initial payment of 38.8
million yuan (approximately US$5 million) to Dongfeng for a 4-percent equity interest
in the joint venture. Closing of this part of the transaction is expected to be
completed by the end of March 2007. Dana Mauritius will purchase the remaining
46-percent equity interest after April 1, 2008, and within three years of receiving
the aforementioned government approvals.
Dana Mauritius will invest in
an existing Dongfeng subsidiary, which is China¡¯s largest commercial
vehicle axle manufacturer, to form Dongfeng Dana Axle. Headquartered in Xiangfan,
China, the joint-venture company will employ approximately 8,000 employees in
three production facilities in Xiangfan and Shiyan, as well as a research and
development center that will be established. The technical center will support
Dongfeng Dana Axle¡¯s commitment to providing its customers with world-class
manufacturing processes and axle components and s ystems.
"We are
very pleased to reach this milestone with Dongfeng," said Nick Stanage, president
of Dana¡¯s Heavy Vehicle Products group. "Dongfeng Dana Axle will
be the largest commercial vehicle axle supplier in Asia. For Dana¡¯s
Commercial Vehicle Systems business, this joint venture also provides a great
opportunity to balance and complement our extensive operations in North America."
Another term of the joint venture agreement between Dana and Dongfeng
is Dana licensing certain commercial vehicle axle technology to Dongfeng Dana
Axle for the term of the joint venture.
Dana has seven other joint ventures
in the Asia-Pacific region, including two in China. With more than 4,300 employees
in 18 facilities in the region, Dana produces axles, propshafts, structures, and
sealing and thermal-management products for a host of light- and heavy-vehicle
manufacturers.
Dongfeng Motor Co. Ltd. is a joint venture between the
state-owned Dongfeng Motor Group Company Ltd. and a Chinese subsidiary of Nissan
Motors. Dongfeng Motor Group was founded in 1969 and with its affiliates ranks
as one of the three largest vehicle makers in China. Dongfeng Motor Co. Limited
produces a broad range of light-, medium-, and heavy-duty trucks, as well as buses
and passenger cars.
Dana is a leading supplier of drivetrain, chassis,
structural, and engine technologies. Dana people design and manufacture products
for every major vehicle and engine producer in th e world. Based in Toledo, Ohio,
with operations throughout the world, Dana is focused on being an essential partner
to automotive, commercial, and off-highway vehicle customers, which collectively
produce more than 60 million vehicles annually. The company¡¯s continuing
operations reported sales of US$8.6 billion in 2005.
Dana and certain
of its US subsidiaries are operating under Chapter 11 of the US Bankruptcy Code
as debtors in possession. Information about the bankruptcy proceedings can be
found at: http://www.dana.com/reorganization. While Dana continues its reorganization
under Chapter 11, investments in its securities are highly speculative. Although
shares of Dana common stock continue to trade on the OTC Bulletin Board (OTCBB)
under the symbol "DCNAQ," the trading prices of the shares may have
little or no relationship to the actual recovery, if any, by the holders under
any eventual court-approved reorganization plan. The opportunity for any recovery
by holders of Dana common stock under such reorganization plan is uncertain and
shares of Dana common stock may be cancelled without any compensation pursuant
to such plan.
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