DETROIT – Delphi Corp.’s planned exit from bankruptcy protection will be delayed, and a key investor is likely to pull out of a deal to pump up to $3.4 billion into the troubled auto parts maker, the company said Thursday.
A spokeswoman for Troy-based Delphi said it expects Cerberus Capital Management LP to leave a group of investors that in December pledged to sink capital into the company in exchange for new shares of its stock.
Delphi had planned to emerge from Chapter 11 by the end of June, but spokeswoman Claudia Piccinin said the possibility of Cerberus withdrawing adds another hurdle to already complex proceedings. She said the reorganization would more likely be completed now in the second half of the year.
The company expects Cerberus to pull out of the investment group, although it has not yet done so, Piccinin said.
“This is an expectation that we have based on conversations,” she said.
Cerberus declined to comment, but if it pulls out, Delphi would be left with a $1.7 billion hole in the investment needed to get out of bankruptcy protection.
Piccinin said the company will proceed with the remaining investors in the group, Appaloosa Management LP, Harbinger Capital Partners Master Fund I, Merrill Lynch &Co. and UBS Securities LLC. Other investors could be added to raise the additional cash, or Delphi could use its own cash freed up by repaying unsecured creditors with more stock.
“We’re still moving forward, but the makeup of our investment group may look different,” Piccinin said.