Hedge fund lenders to Delphi are reportedly objecting to an allegedly secretive deal under which Delphi plans to sell its assets to GM and Platinum Equity.

The Financial Times reported that the funds, including Double Black Diamond Offshore and Greywolf Capital, alleged in a court filing that the sale failed to maximise the value of Delphi's assets pledged as collateral for their loans.

"The proposed transaction was secretly negotiated with GM, Platinum and the US Treasury's auto taskforce - while a courtordered mediation was in process - without anything remotely resembling a proper mergers and acquisition process," the funds claimed. "[It] represents a giveaway of significant value."

Delphi has been in Chapter 11 for four years and a restructuring plan collapsed in early 2008 when a group of outside investors withdrew as the auto industry went into sharp decline.

Since then, the FT notes, Delphi has been kept going by GM and by providers of US$3.3bn in debtor-in-possession loans, including the hedge funds.

GM and Delphi contend that they have no other options apart from the deal with Platinum.

GM warned in a court filing this month that "it cannot continue to fund Delphi's liquidity needs and must take measures to secure continuity of supply".

The FT report added that Delphi's bankruptcy court is due to approve the sale to Platinum on July 23. However, it has bowed to protests from some lenders to consider competing bids, with a submission deadline of July 10, the FT said.

The dissident hedge funds are said to be considering a bid themselves.