Delphi will emerge strong, analyst predicts

STAFF/WIRE REPORT

DETROIT — Highland Capital Management LP proposed a refinancing plan worth up to $4.7 billion to Delphi Corp.’s board today, competing with a plan already accepted by the nation’s largest auto parts maker earlier this week.

Analysts said the move was further evidence that Delphi has a future after it emerges from Chapter 11 bankruptcy protection.

Delphi said Monday that an investor group led by Appaloosa Management LP and Cerberus Capital Management LP would spend as much as $3.4 billion to help the company out of bankruptcy. Delphi filed for bankruptcy protection in October 2005.

The International Union of Electrical Workers, which represents Delphi workers in the Mahoning Valley and some other locations, filed an objection to the Appaloosa proposal Wednesday with the bankruptcy court.

The union said it was objecting because it hasn’t met with the Appaloosa group and wanted to preserve its legal rights. It also objected to $113 million in fees that the group is to receive.

In a letter to Delphi’s board, Dallas-based Highland Capital, a hedge fund that owns 8.9 percent of Delphi, said it opposed the earlier plan and outlined its own proposal.

Highland Capital said in a statement that its plan was “fair to all groups that currently make up Delphi’s capital structure” and would promote “good and independent corporate governance for the company.”

Delphi spokesman Lindsey Williams said the company had no immediate comment. Appaloosa and Cerberus didn’t return calls seeking comment.

Craig Fitzgerald, an industry analyst with Plante & Moran, said the Highlands proposal provided further evidence that Delphi would emerge from bankruptcy “good-sized, focused and competitive.”