Auto parts supplier Delphi, Tuesday emerged from bankruptcy after being in the red for four years, selling most of its assets to Delphi Holdings LLP, which is led by senior creditors Elliott Management Corp and Silver Point Capital LP.
Delphi has now become a private company following the acquisition of substantially all of its global core businesses by Delphi Holdings LLP.
"We're pleased to see a final resolution to the bankruptcy and wish the newly emerged Delphi success," said GM President and CEO Fritz Henderson.
The Troy, Michigan-based company would sell certain U.S. plants to affiliates of GM, including its global steering operations, and four manufacturing plants. The Steering operations include manufacturing, engineering and customer service sites in the United States and other locations outside the U.S.
Delphi Holdings LLP has agreed to forgive about $3.5 billion of bankruptcy loans, which it bought from lenders, and will invest $900 million in capital in the new company. The closing of the transaction in Russia and South Africa is subject to regulatory approvals.
The newly emerged company's product portfolio will be focused on electronics and safety, powertrain, thermal, electrical and electronic systems, OE service, and the independent aftermarket.
Rodney O'Neal will remain president and CEO, and the current leadership will continue to manage the company's global operations.
Delphi filed for bankruptcy on October 8, 2005, which was one of the largest bankruptcy ever in the auto industry at that time. The company's bankruptcy was a heavy blow to the U.S. auto industry, reflecting the high labor costs and increasing foreign competition amid slumping demand.
Delphi nearly emerged from bankruptcy last year, as a group of investors, led by the Appaloosa Management LP hedge fund, came forward to invest up to $2.55 billion into Delphi in exchange for equity in the reorganized company. However, the hedge fund later withdrew its investment deal.
As the deal with the hedge fund failed, Delphi struggled hard to raise necessary financing to restructure. Delphi had been relying on financing from its former parent GM, which itself filed for Chapter 11 bankruptcy protection in June 1, amid weakening auto demand and the credit crunch.
DPHIQ.PK closed Tuesday's regular trading session at $0.04, down 2 cents or 33.17% on a volume of 45.03 million shares.
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