Delphi Sells Entire Stake in Japanese Auto Parts Maker Akebono Brake

TOKYO July 13, 2005; Japan Today reported that U.S. automotive parts maker Delphi Corp has severed capital ties with Akebono Brake Industry Co, unloading its entire stake in the Japanese brake manufacturer, the Nihon Keizai Shimbun reported Wednesday.

The report said Delphi sold 5.5 million Akebono shares, or roughly 5.9% of the brake maker's outstanding shares, on June 28 for an estimated 3.7 billion yen. (Kyodo News)

TOKYO The AP reported this story as follows: Delphi Corp., a major U.S. auto parts-maker that does bulk of its business with General Motors, has sold its entire stake in Akebono Brake Industry Co. of Japan, both sides said Wednesday.

Delphi, based in Troy, Michigan, sold 5.5 million Akebono shares last month, and Akebono bought back 3.5 million for 2.36 billion yen ($21 million), the Japanese brake-maker said.

Delphi, spun off from General Motors Corp. in 1999, reported a $403 million loss for the first quarter of this year, hurt by falling sales and production cuts at GM.

Japan's top automaker Toyota Motor Corp. acquired 2 million Akebono shares, raising its stake in Akebono from 13.8 percent to 15.9 percent, Toyota spokesman Paul Nolasco said. Akebono is a major brake supplier for Toyota, and Toyota was already Akebono's top shareholder before the latest deal. He declined to give a monetary value for the purchase.

"When the opportunity to purchase the shares came along, it was a natural thing to do," Nolasco said.

A spokeswoman for Delphi's Japanese unit confirmed Delphi sold 5.5 million shares in Akebono, 3.5 million to Akebono for $20 million, and 2 million shares to "a third party" it declined to identify.

The spokeswoman, who requested anonymity, did not give an overall dollar amount but said the sale was part of its financial strategy.

Earlier this month, Delphi said it completed the sale of its car-battery business to Johnson Controls Inc. for $202.5 million as part of a restructuring plan.

Akebono's business with General Motors accounted for about 8 percent of its nearly 133 billion yen ($1.2 billion) in annual sales. The company, based in Hanyu city, did not have an estimate for its business with Delphi.

As of the end of March, Delphi's stake had accounted for 5.6 percent of Akebono shares.