Appaloosa backs out of Delphi deal in blow to GM
Appaloosa Management LP said on Friday it terminated a $2.55 billion equity investment plan to support Delphi Corp DPHIQ.PK, dealing a blow to the auto parts maker’s planned exit from bankruptcy and to former Delphi parent General Motors Corp (GM.N: Quote, Profile, Research).
Delphi said it had arranged exit financing and started the formal closing process on Friday to complete the reorganization and exit bankruptcy protection when Appaloosa served notice it was backing out of the deal.
Appaloosa, leader of the investor group, cited Delphi’s arrangements with GM on exit financing as one of its reasons for terminating the current agreement.
Appaloosa said the financing arrangements would give GM too much influence and would have too much of an impact on the equity investment, but said it remained open to an alternate arrangement no teletrack payday loans.
Delphi, which struggled to complete $6.1 billion of exit financing for its emergence due to rocky credit markets, said it had successfully arranged the financing by Friday.
“We are extremely disappointed that our plan investors have taken the position that they are not obligated to fund their plan investment commitments to Delphi and instead have chosen to walk away from the company and its stakeholders,” Delphi Chief Restructuring Officer John Sheehan said in a statement.
Sheehan also said Delphi was prepared to pursue actions in the best interest of the company and its stakeholders, but Delphi did not specify what those might be.
GM also said it was “disappointed.”