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Delphi Investor Group Backs Out

TSC Staff

A group led by Appaloosa Management plans to call off the proposal to invest roughly $2.5 billion in bankrupt auto-parts supplier Delphi (DPHIQ - Cramer's Take - Stockpickr), saying the company hasn't met its part of the arrangement.

The investor group also wants to be paid a fee of $82.5 million because the deal couldn't be closed as expected. However, Appaloosa said it would be willing to consider an alternative transaction with Delphi "and will continue to actively engage in such discussions."

As a result, Delphi's plan to end its time in bankruptcy will likely be postponed. The former GM (GM - Cramer's Take - Stockpickr) division filed for Chapter 11 in the fall of 2005. Details of the Appaloosa decision were filed with the Securities and Exchange Commission Friday.

Shares of Delphi last closed at 12 cents, and lately they were down 3 cents. GM was losing 72 cents, or 3.3%, to $20.87.