DETROIT, July 9 — The Delphi Corporation, the large auto supplier, said today that it had terminated a $3.4 billion financing plan to bring the company out of bankruptcy protection but that it expected to sign a new deal this month.þþThe company said it still planned to emerge from Chapter 11 by the end of the year. Its board is scheduled to meet July 16 to consider a new financing agreement.þþ“We would anticipate that some of the same plan investors would be involved with the transaction going forward,” said a Delphi spokesman, Lindsey Williams.þþDelphi had said before that the lead investor in the deal, the private equity firm Cerberus Capital Management, was likely to withdraw after it was unable to reach a labor agreement with the United Automobile Workers and its former parent, General Motors. The three parties signed a deal last month after nearly two years of negotiations; it allows Delphi to significantly cut longtime workers’ wages and close or sell all but four plants in the United States.þþDelphi said today that it planned to file the labor deal as part of its reorganization plan rather than seek separate approval for it from the bankruptcy court.þþCerberus and other equity firms, including Appaloosa Management and Harbinger Capital, had agreed in December to buy Delphi for $3.4 billion. Delphi picked the Cerberus-led bid over a competing offer of $4.7 billion made by Highland Capital Management.þþDelphi, which filed for bankruptcy protection in October 2005, recently agreed to share confidential financial information with Highland, according to a regulatory filing, suggesting that Highland could be involved in a new agreement.þþMr. Williams said all of the parties in the original agreement had the right to end it at any time. He did not confirm that its dissolution was precipitated by Cerberus’s withdrawal.þþA Cerberus spokesman, Peter Duda, was not available for comment this morning.þþAs talks between Delphi and the U.A.W. dragged on, Cerberus turned its focus to a buyout of the Chrysler Group from DaimlerChrysler. Cerberus is expected to close on its $7.4 purchase of Chrysler later this month.þþCerberus’s growing empire in the auto industry also includes a majority stake in G.M.’s financing arm, the General Motors Acceptance Corporation.þþ
Source: NY Times
