Delphi investor may withdraw from revival plan
By Our Corporate Bureau | 21 Apr 2007
Cerberus Capital Management, a major investor involved in a plan to invest up to $3.4 billion to bail out bankrupt automotive components manufacturer Delphi may be pulling out of the revival plan.
According to a Delphi spokesperson, Cerberus Capital could leave the investor group that had pledged in December to infuse capital in the company. The spokesperson said though Cerberus had not terminated its commitment to Delphi's revival, "This is an expectation that we have based on conversations."
Delphi, which went in to Chapter 11 bankruptcy protection, said it would move ahead without Cerberus because of a difference of views on the value of the reorganised company.
In December 2006, Cerberus had committed $1.7 billion to the beleaguered auto components maker, which was contingent on reaching a wage and benefit agreement with labour unions.
Delphi says it would proceed with its reorganisation plan with the existing investor group. Delphi's investors, apart from Cerberus, include Appaloosa Management, Harbinger Capital Partners Master Fund I, Merrill Lynch and UBS Securities.
Analysts say Cerberus's departure could be a "major stumbling block" to the overall deal.
