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CHAMPION PARTS TO MAKE $2.4 MILLION PAYMENT TO ECHLIN, INC. STEMMING FROM 1987 STOCK PURCHASE AGREEMENT

 CHAMPION PARTS TO MAKE $2.4 MILLION PAYMENT TO ECHLIN, INC.
 STEMMING FROM 1987 STOCK PURCHASE AGREEMENT
 OAK BROOK, Ill., March 9 /PRNewswire/ -- Champion Parts, Inc. (NASDAQ: CREB), a major remanufacturer of replacement parts for cars, trucks and farm equipment, announced today that it would be making a $2.4 million payment to Echlin, Inc. (NYSE: ECH), its largest stockholder.
 This obligation stems from Echlin's 1987 purchase of 600,000 shares of Champion Parts' common stock for $9 per share, for a total of $5.4 million. Champion Parts' common stock has been trading at about the $4 level. Under the 1987 stock purchase agreement, Echlin received protection against the decline in the market price of Champion stock, up to the maximum of $4 per share.
 In its request for payment, Echlin commented, "We commend Champion Parts' management team for the operational and financial performance Champion Parts has demonstrated in the difficult economic climate of the North American automotive parts industry. For the record, the basis for our exercise of these market value rights is economic and should not be interpreted by the management team as any indication of a diminished confidence in our underlying investment in Champion Parts.
 "Echlin remains our largest stockholder, with 600,000 shares or about 16.5 percent of our 3,655,266 outstanding shares," said Charles P. Schwartz Jr., Champion's chairman and chief executive officer. "It also continues to be our largest supplier, and a mutually beneficial relationship exists between the two companies.
 "The Echlin payment, which will be made over three years, requires modification of our bank credit arrangements. We have reached agreement in principle with our bank group on the terms of needed changes," said Schwartz.
 "Champion Parts expects shortly to publish 1991 financial results," said Schwartz. "As previously indicated, sales declined in 1991, and a moderate loss will result after nonrecurring and extraordinary costs connected with already announced plant consolidation, product restructuring and early retirement of subordinated debt, all of which are expected to benefit 1992 results, which are budgeted to produce a profit. Working capital, after the Echlin transaction, is expected to be in excess of $43 million, and net worth over $26 million, or more than $7 per share.
 Champion Parts is the country's largest independent automotive replacement parts remanufacturer in the multi-billion-dollar automotive, truck and farm equipment aftermarket. It remanufactures, tests and distributes nearly 5 million parts each year throughout the U.S. and Canada. Its major products, representing some 80 percent of the sales volume of rebuilt parts sold by automotive jobbers and retail outlets, include fuel-system products such as carburetors, and a wide line of automotive electrical and mechanical parts. The company currently employs about 1,750 men and women and operates three major plants in the U.S. and Canada.
 -0- 3/9/92
 /CONTACT: Charles P. Schwartz Jr. of Champion Parts, 708-573-6600; or Alex Tassos of Alex Tassos & Associates, 619-451-8784, for Champion Parts, Inc./
 (CREB ECH) CO: Champion Parts, Inc.; Echlin, Inc. ST: Illinois IN: AUT SU: ACC


DH -- DE016 -- 6420 03/09/92 12:33 EST
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Publication:PR Newswire
Date:Mar 9, 1992
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