|
Private group to invest up to $3.4 bln in Delphi
2006-12-18
A private equity group led by Appaloosa Management LP and Cerberus Capital Management LP will invest up to $3.4 billion in bankrupt auto parts maker Delphi Corp. (Other OTC:DPHIQ), giving the investors a large stake when the company emerges from bankruptcy, Delphi said on Monday. Delphi also said Chairman and Chief Executive Steve Miller will step down as CEO on January 1 and be succeeded by President and Chief Operating Officer Rodney O'Neal. O'Neal will serve as president and CEO when Delphi emerges from bankruptcy. Delphi, which also said it would file a framework agreement for a plan of reorganization on Monday, said the deal is contingent on the company reaching agreements with former parent General Motors Corp. (NYSE:GM) and automotive labor unions. The company, which filed for bankruptcy in the United States in October 2005, has outlined plans to cut thousands of hourly and salaried workers, close or sell 21 of 29 U.S. union plants and drop several business lines to reorganize. The investor group also includes Harbinger Capital Partners Master Fund I Ltd., Merrill Lynch & Co. and UBS Securities LLC. Investors can terminate the agreement if Delphi does not reach deals with GM and the unions by January 31, Delphi said. Troy, Michigan-based Delphi said the investors and GM have signed off on the proposed reorganization plan. Delphi said it will seek bankruptcy court approval of the investment and plan framework on January 5. Miller, who joined Delphi in mid 2005 to guide the restructuring, will remain an executive chairman through the company's emergence from bankruptcy. Delphi expects to emerge from Chapter 11 in the first half of 2007.
| 
