West Palm Beach (HedgeCo.Net) – Delphi’s lead investor is still interested in working out a deal, days after they yanked their financing and left the Detroit auto parts maker stuck in bankruptcy.
"We’d like to work something out with these guys, sure," David Tepper, President of the New Jersey based hedge fund Appaloosa Management, said in a short interview Wednesday with The Associated Press.
Tepper, who made his fortune off investing in distressed companies, walked away from his $2.55 billion commitment to Delphi after they failed to secure the rest of the $6.1 billion needed to exit Chapter 11.
When pulling out, Appaloosa said they were still interested in negotiating with Delphi, though not under the current circumstances. One of those reasons was the $2.8 billion injection into Delphi via General Motors, the original parent company. Appaloosa thought this would give GM too much control and may hurt Delphi’s relationships with other potential clients.
Moody’s Investors Service also withdrew its prospective debt ratings on Delphi’s emergence financing, but said the move was standard procedure when refinancing plans change.
"If the deal is repackaged, their rating will be based on that repackaged scenario," said Lindsey Williams, spokesperson for Delphi.
Even if the two companies reach an agreement, the bad blood is already circulating. Appaloosa is accusing Delphi of breaching an agreement it had with the other investors. Meanwhile, Delphi has accused members of Appaloosa of shorting their stock with the anticipation of the original deal falling through.
Other investors that were set to contribute part of the $2.55 billion were UBS, Harbinger Capital, Merrill Lynch, Pardus Capital and Goldman Sachs.
Julie Scuderi
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