Bendix Brakes, the Ballarat-based manufacturer owned by the beleaguered First Brands Group, is facing significant challenges in its ongoing sale process due to longstanding asbestos-related liabilities embedded within its balance sheet. The company’s troubled financial position and the legacy of asbestos use in its products, which persisted well into the 1990s, have complicated efforts by potential buyers to value and acquire the business.

Several prospective buyers, including Penrite, the engine oil company owned by the Dymond Family, and ASX-listed automotive parts firm Amotiv, reportedly withdrew from the bidding process over concerns tied to these historic asbestos liabilities. An overseas bidder, identified as New York-listed Phinia, has emerged as one of the remaining contenders, reportedly valuing Bendix at approximately $220 million, a figure notably higher than some other suitors who have placed the company’s worth closer to $150 million amid liability uncertainties.

Bendix’s holding company, FMP Group Australia, initiated voluntary administration on November 2, appointing Grant Thornton to oversee the process, while a lender installed Vaughan Strawbridge and John Park from FTI Consulting as receivers. This administration follows Last year’s bankruptcy filing by First Brands Group, based in Ohio, which triggered a sale auction managed by investment bank Houlihan Lokey. First Brands’ Chapter 11 bankruptcy filing revealed an estimated $50 billion in liabilities against $10 billion in assets, underscoring the financial instability affecting its subsidiaries.

Asbestos, a known carcinogen linked to diseases such as asbestosis, lung cancer, and mesothelioma, was incorporated into Bendix’s brake pads and related products until it was phased out in 2003 following Australia’s nationwide asbestos ban. The company historically supplied brake components to approximately 40 international markets. The handling of asbestos-related claims in the sale is a critical concern, as unresolved liabilities could either burden a new owner or limit recourse for future claimants affected by exposure to the mineral’s hazardous fibers.

Discussions within Bendix’s advisory team reportedly include exploring the creation of a compensation fund dedicated to addressing legacy asbestos claims as part of completing the sale. Neither Grant Thornton nor FTI Consulting have provided comment on this matter. The resolution of asbestos liabilities is closely watched not only for its legal and financial implications but also for its environmental, social, and governance (ESG) considerations in the automotive industry.

First Brands acquired Bendix two years ago after it was placed on the market by Nasdaq-listed Garrett Motion and Bosch’s Pacifica Group. The ongoing sale process seeks to secure the company’s future amid the complex challenge of legacy risks and the broader consequences of its parent company’s bankruptcy.