Troubled textile giant Guilford Mills Inc has announced it plans to sell its Twin Rivers factory in Schenectady, New York, to print fabric converter H Greenblatt and Co for an undisclosed sum.

The announcement comes less than a week after the North Carolina-based company filed for Chapter 11 bankruptcy protection after agreeing a deal with its lenders to reduce its $270 million debt to $145m.

Guilford Mills officials said in a statement last week they expected to emerge from bankruptcy protection as a manufacturer of automotive fabrics, although they will continue with an apparel factory in Mexico.

Commenting on the deal, Howard Greenblatt, said: "We feel privileged to build on the great work that Guilford and the staff at Twin Rivers have accomplished. This acquisition provides us with the opportunity to better serve our customers during these challenging times for the American textile industry."