Delphi Struggles To Emerge From Bankruptcy
By Anthony Fontanelle

Delphi Corp. finds it hard to emerge from bankruptcy. Matter of fact, the ailing auto parts supplier is struggling to raise $6.1 billion in financing. This resort is without limitation to pursue other moves such as turning to General Motors Corp. for help or offering its pension plans a stake in the company, Detroit News reported.

The Troy-based auto supplier’s planned exit from bankruptcy after about more than a couple of years and more than $320 million in accounting, consulting, and legal bills could be held in abeyance in a matter of months if Delphi has to renegotiate its exit plan and seek the approval of U.S. Bankruptcy Court.

For months now, Delphi has been trying to raise fund money. What’s more, the supplier twice slashed the target amount from $8.7 billion initially to $6.1 billion in January. Delphi's bankers, led by JP Morgan Chase and Citigroup Global Markets, have been trying to sell the debt in a hard credit market. According to reports, about $200 billion in loans have gone unsold. The loans cover the aid given to Cerberus Capital Management to finance the acquisition of Chrysler LLC from its former German parent Daimler AG.

A person familiar with the subject told the news authority that Delphi may seek to tap into the money it plans to contribute to its pension plan once it emerges from bankruptcy. Delphi also could seek financial support from GM, its former parent. At a hearing in December, U.S. Bankruptcy Judge Robert Drain, who approved Delphi's emergence plan, noted the dilemma Delphi faces in raising more money. "When you don't have cash and you can't raise debt, the solution is to provide equity," he said.

Automotive