Up to 35 private investors and suppliers are circling German wheel-maker BBS AG, which has been in receivership since 7 February, according to lawyers sorting out the company’s affairs.

A ‘beauty contest’ to find the next owner of the company is entering its second phase, with the winner expected to be named as early as June.

The initial interest from 35 potential buyers “from all over the world”, according to Marc Hornung, a lawyer with administrator Wellensiek, is being whittled down with help from the Frankfurt office of merchant bank Rothschild.

“We hope to announce a buyer in the next six to 10 weeks. We are talking to several investors and competitors and are very hopeful of securing BBS’s future,” added Hornung.

“We received indicative offers two weeks ago and we are now moving into due diligence,” he said.

BBS is a tier one supplier to BMW, Ferrari, Jaguar, Maserati, Porsche and VW, among others, but is also very active in motor sport.

Last year five F1 teams used its wheels and Michael Schumacher has won seven Grand Prix titles in Ferraris using the company’s products.

Despite these high profile customers and a niche for providing high quality, high-margin parts, the company has been dragged down by relentless rises in the cost of its main raw material, aluminium, which it has struggled to pass on to customers.

“There are other issues like management problems and other cost problems, but the basic business is strong,” said Hornung.

No price for the business has been mentioned, but BBS has generally been profitable in most of the last few years, according to the receiver.

About half its business is with car makers, the balance with aftermarket retailers and tuners.

Turnover in 2006 was EUR163m, a drop from the previous year of EUR195m. Business started to tighten in 2004, when the company just broke even on turnover of EUR190.4m. Losses started to build in 2005 when BBS AG sank into the red, a development partly blamed on investment in a new technique to make lightweight wheels, called ‘air inside technology’.

This technique is used on the latest Golf GTi wheel. As well as saving around 5kg from a typical wheel, it also stiffens the rim by up to 60%, reducing damage.

Under the protection of the German courts, both BBS factories in Germany and their 830 employees plus a joint venture factory in China continue to make wheels.

In 2000 BBS expanded from its historic base in Schiltach with a new factory and warehouse in nearby Herbolzheim, taking an option on up to 180,000 sq ft of extra space. Today 580 people are employed at Schiltach and 250 at Herbolzheim. The workforce in China numbers 460.

BBS was set up in the 1970s by Heinrich Baumgartner and Klaus Brand to make making plastic body panels and was based in the town of Schiltach. Together the three initials gave the company its name.

Julian Rendell