Delphi Chairman Steve Miller has said that he’s confident the firm will get financing and emerge from Chapter 11, but that it will take months, not weeks. Tough times in credit markets have put the emergence back.
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Delphi’s exit from Chapter 11 was thrown off course earlier this month when a group of investors led by hedge fund Appaloosa Management LP backed out of a USD2.55 billion equity investment agreement.
The Appaloosa Management-led investment was a key part of the reorganisation, which has been complicated by a tight credit market. Appaloosa’s pullout places the exit plan in jeopardy and raises the issue of whether GM will have to put in even more money than it already has pledged to help the company.
Miller told reporters that Delphi was ‘stymied by problems in the credit markets.’ Delphi has been in Chapter 11 since October 2005.
However, Miller maintained that he’s confident that a deal that will allow Delphi to exit bankruptcy will get done.
“It won’t get done in weeks,” he said. “It’s going to be months, but we will get it done.”
Miller also said Delphi’s operational reorganisation – selling and closing unprofitable plants, new labour agreements and focusing on specific business lines – is sound.
Whether Appaloosa is part of the new financing or not remains to be seen, Miller said.
