GM credit talks boost price of Delphi shares

Tuesday, November 28, 2006
GM credit talks boost price of Delphi shares
Investors believe the bankrupt auto parts supplier will be able to limit in liabilities.
Steven Church / Bloomberg News






NEW YORK -- Delphi Corp. shares have climbed sevenfold this year because of speculation the bankrupt auto supplier will limit billions of dollars in claims by former owner General Motors Corp., two consultants said.

Appaloosa Management LP, a hedge fund, has become Delphi's biggest shareholder since the October 2005 bankruptcy filing. The shares, now trading at around $2, might top $14 if Delphi were to succeed in shedding GM's claims entirely, bankruptcy lawyer David M. Powlen said Monday at a conference in New York.

"Appaloosa has bet that GM's claims are not legitimate," Shaun K. Donnellan, chief executive officer of turnaround company Glass & Associates, said at the Distressed Investing 2006 Conference. Appaloosa President David Tepper didn't immediately return a call seeking comment.

Delphi shares have climbed from 29 cents at the start of the year, the biggest gain among the five major U.S. auto-parts makers that have filed for bankruptcy since the start of 2005. The companies, including Dana Corp. and Dura Automotive Systems Inc., blamed rising raw-material costs and slowing production by U.S. automakers GM and Ford Motor Co.

Delphi spokesman Lindsey Williams declined to comment. GM officials didn't immediately return messages seeking comment.

Shares of Troy-based Delphi fell 1 cent to $2.16 in over-the-counter trading Monday, valuing the company at $1.21 billion. Appaloosa, based in Chatham, New Jersey, said in a regulatory filing in August that it owned 52 million Delphi shares, or 9.3 percent of the total outstanding.

Delphi and GM have been trying to negotiate a restructuring plan for months. A lawyer for Detroit-based GM, the world's largest automaker, said in April that Delphi owes the company more than $4 billion. Delphi creditors have claimed GM should pay Delphi, its largest auto-parts supplier, $26 billion.














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