Delphi’s exit from bankruptcy is threatened by the tightening of credit markets and may require help from former owner General Motors, US reports have said.
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According to the Wall Street Journal (WSJ), lenders to Delphi, including JPMorgan Chase & Co., a Citigroup unit and hedge funds, are rejecting the pricing of loans for the $US6.1bn reorganisation based on their risk. Bloomberg News noted that Delphi’s reorganisation plan was approved last month by a federal judge.
The WSJ said investors may look to GM to provide financing, though shareholders may be sceptical of Delphi being subjected to its former owner’s cost-cutting, according to the WSJ. It added that GM chief financial officer Fritz Henderson has said the automaker is looking for ways to assist the reorganisation but other reports said the CFO declined to be drawn on that during a conference call on Tuesday to discuss GM’s 2007 results.
Henderson told the Wall Street Journal GM is exploring options in the event Delphi can’t obtain the Chapter 11 exit financing as planned.
“Our objective is to have Delphi exit,” Henderson said in a Journal interview.
“What we’ve tried to do is be constructive with Delphi and the plan investors as to how we play a role,” Henderson reportedly added.
