Wescast says Chinese buyer failed to pay deposit
Wescast Industries Inc. said it has not received an initial $2 million (13 million yuan) deposit from Sichuan Bohong Industry Co. -- the first step of a proposed acquisition of the Canadian company.
Wescast, which produces exhaust manifolds for cars and light trucks, negotiated a memorandum of understanding with the Chinese company on Sept. 5.
As part of the acquisition, Bohong was supposed to make its first payment on Sept. 19.
In a statement, Wescast said "there can be no assurances" that the acquisition will occur.
Westcast, which is based in Brantford, Ontario, employs 2,000 workers in 7 factories worldwide. In addition to exhaust manifolds, the company makes exhaust components, turbocharger housings and other components.
Bohong, a private company established in 1999, makes steering components, brake parts and engine blocks. Customers include TRW, Bosch, Visteon and Delphi as well as domestic Chinese suppliers.
Last year, Bohong's sales revenue totaled 4 billion yuan ($627 million).
