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 systems.
"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 the 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.
(China.org.cn March 20, 2007)