Tough Times in Troy
Auto-parts supplier
Delphi
( DPH) said it has accessed the majority of a revolving credit facility as part of a possible restructruing plan that would probably be aimed at keeping the company out of bankruptcy.
The company said in a press release Friday that on Aug. 3 it drew down $1.5 billion of its $1.8 billion revolving credit line. Delphi said the draw was connected to talks with its main unions and former parent company
General Motors
(GM) - Get General Motors Company Report
regarding a restructuring of its U.S. operations.
GM is the company's largest customer. Shares of Delphi, based in Troy, Mich., were losing 51 cents, or 9%, to $5.27 in active trading.
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The Wall Street Journal
quoted Delphi Chairman and CEO Robert Miller as saying the dialogue has been "very constructive and give me hope that we can restructure out of court."
Delphi hired Miller earlier this summer. At the time, he was the nonexecutive chairman of
Federal-Mogul
( FDMLQ). He replaced the company's founding chairman J.T. Battenberg III, and his appointment came on the heels of the board's decision to cut Delphi's dividend in half, citing "significant challenges" facing the auto industry.
The company has recently restated three years of financials. In calendar 2004, Delphi reported revenue of $28.6 billion and a loss of $4.8 billion. The company lost more than $400 million in the first quarter and expects a loss for the full year as well.
On Monday, Delphi plans to file its quarterly financial statements with the
Securities and Exchange Commission
and also hold a briefing on its second-quarter results.
