DETROIT -- A group of Delphi equity investors led by billionaire David Tepper has hired financial advisers to explore a "potential restructuring, acquisition or other transaction involving Delphi."
Tepper's hedge fund Appaloosa Management LP and Harbinger Capital Partners Master Fund I Ltd. have hired UBS Securities LLC and Merrill Lynch & Co. to assist in structuring and finding financing for any possible deal. A hedge fund is a speculative, largely unregulated investment fund used by the wealthy to make high-risk and high-return investment strategies.
The funds' managers agreed not to disclose sensitive operating and financial information that Delphi Corp., of Troy, Mich., might provide as part of the analysis, according to a filing today with the U.S. Securities and Exchange Commission.
Appaloosa bought 52 million shares of Delphi shortly after the company put its U.S. operations in Chapter 11 bankruptcy protection on Oct. 8.
Though equity stakeholders typically have their investments wiped out after bankruptcy debts are paid, Tepper said earlier this year that Delphi would have value left because of its profitable overseas operations. He did not return a phone call left at his office today after regular business hours.
Delphi spokeswoman Claudia Piccinin declined to comment on the specifics of the filings but said it is common for a company in bankruptcy to talk with its largest shareholders.
Delphi intends to emerge from Chapter 11 protection sometime in 2007. The company is in the process of shedding at least 12,900 of its hourly workers who have agreed to retire with incentives financed, in part, by its largest customer, General Motors.
Delphi and its six unions led by the UAW are at loggerheads on wage and benefit cuts of 60 percent demanded by Delphi as part of a restructuring of its U.S. operations. A hearing is scheduled Aug. 11 on Delphi's petition to terminate its labor agreements.
The UAW and its second-largest union, the IUE-CWA, have threatened to strike Delphi if the petition is approved.
You may e-mail David Barkholz at [email protected]