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FRANKFURT, Germany (AP) _ German machine-builder Babcock Borsig said Monday it has agreed to sell its U.S. subsidiary, which makes equipment for power plants, to the New York-based private equity firm Hudson Investment Group.

The Babcock Borsig Capital Corp. unit, based in Burlington, Mass., makes steam generators and heat exchangers that are used in electricity generating plants. It also produces pollution control equipment that removes gases such as sulfur dioxide from smokestacks.

Babcock Borsig did not disclose the price of the sale. The U.S. business and its 1,500 employees have carried on work uninterrupted despite a July bankruptcy filing by its parent company, based in Oberhausen, Germany.

According to a company statement, the agreement states that Babcock Borsig Capital will abandon any financial claims on Babcock Borsig AG.

Babcock Borsig, which makes equipment for power, water and waste-disposal plants, filed for bankruptcy four months ago after the sale of its most profitable asset, a stake in German shipbuilder HDW, prompted a steep dive in its share price.

The court-appointed administrator overseeing the company's finances said the deal was good for the company's creditors.

``As a result of these negotiations we have achieved not only a cash influx for the seller, but for several insolvent companies under the umbrella of Babcock Borsig AG,'' Schmitz was quoted as saying in the statement.

``The renunciation of claims on Babcock Borsig AG is to the benefit of the creditors, who can expect a further raising of their share,'' he said.