Delphi auction put off again
The Bankruptcy Court auction of auto parts maker Delphi Corp. has been delayed for a second time as creditors consider their own rescue plan to counter one by a Beverly Hills investment firm.
U.S. Bankruptcy Judge Robert Drain postponed Tuesday’s scheduled auction until Friday. It was originally to have been last week.
Beverly Hills investment firm Platinum Equity has the only bid on the table for Delphi.
However, a group of Delphi’s bankruptcy lenders said last week that they planned to submit a “credit bid,” which would involve forgiving Delphi’s debts in return for a majority stake in the company. Various lenders have provided almost $3.5 billion in financing to Delphi since it filed for bankruptcy in October 2006.
The lenders have objected to the Platinum bid, saying it would provide big returns for the firm while they would recoup only 20 cents on the dollar. A majority of Delphi’s creditors voted against the Platinum deal, according to court documents filed late Monday.
Meanwhile, a possible three-way deal involving Platinum, GM and Delphi’s lenders remains under discussion.
Much of Platinum’s proposed $3.6-billion acquisition of Delphi would be financed by GM, which also would acquire several of Delphi’s North American plants and its global steering business. Platinum has said it would put up $250 million in cash when the deal closes and put another $250 million in a fund that Delphi could draw on as needed.
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