Delphi Loan Falls Apart: Future Uncertain for Auto Supplier
After 30 months of wrangling with the UAW, General Motors Corp. and a parade of private equity players, Delphi Corp. Chairman Steve Miller appeared close to wrapping up one of his most important turnarounds. Lenders, vendors, GM representatives and more assembled Friday morning to complete the paperwork on a $6.1-billion loan that would lead the nation’s largest auto parts maker out of bankruptcy and back on its own two feet. But one of the company’s owners, hedge fund Appaloosa Management LP, didn’t show up and instead pulled out of its contract with the supplier, saying Delphi violated a deal that would have pumped another $2.5 billion into the company.
Myers Sale Delayed
Myers Industries has announced a second delay in its planned sale to Goldman Sachs’ private equity group GS Capital Partners. The $1 billion deal, announced last April, was to close in September. The closing was put off until Dec. 15, a point the Akron, Ohio-based plastics and tire tool and equipment distributor reaffirmed in November. Now the deal will not close until April 30, 2008.
Delphi Agrees to Sell Steering Business
Bankrupt auto supplier Delphi Corp. said Tuesday it agreed to sell its global steering and halfshaft business to a private equity group. Delphi did not disclose financial terms of the deal with Steering Solutions Corp., a unit of Platinum Equity LLC. The company also said it sealed a "transaction facilitation agreement" with General Motors Corp. that foresees GM "making certain commitments to Delphi in connection with the sale.
Cerberus Drops $4 Billion Chrysler Bond As Credit Crunch Bites
The credit market crisis is causing three headaches for Cerberus Capital, the private equity firm named after the mythical, many-headed hound of Hades. The firm was yesterday working on a turnaround plan for its GMAC Finance business, which it partly owns with General Motors and whose residential mortgage business is perilously close to breaching debt covenants that could result in its tipping over into bankruptcy. At the same time, financiers for Chrysler, the carmaker purchased by Cerberus earlier this year, were forced to abandon a $4 billion bond sale, raising fears that investors are turning their backs on the market for loans from highly leveraged private equity-owned companies. The news came a day after Cerberus was sued in a U.S. court over its attempt to wriggle out of another leveraged buy-out deal it signed in the summer.
Dana Gets New Offer for Bankruptcy Exit
Appaloosa Management, the largest shareholder in Dana Corp., has made an offer to finance the auto-parts company’s exit from bankruptcy, competing with a bid from Centerbridge Capital Partners. The proposal from Appaloosa, a private equity firm based in Chatham, NJ, will be reviewed this week by Dana’s creditors committee, Chuck Hartlage, a spokesman for the maker of automotive frames and axles, said Friday.
DURA Completes Sale of Atwood Mobile Products Division for $160 Million
Insight Equity I L.P., the Dallas, TX-area private equity firm, and DURA Automotive Systems, Inc. have announced the close of the sale of DURA’s Atwood Mobile Products division to Insight Equity I L.P for $160.2 million. Insight made the acquisition through Atwood Mobile Products LLC (Atwood Acquisition Co., LLC), the investment vehicle Insight created for the acquisition of Atwood, an independent manufacturer of gas appliances, windows, doors, electronics and hardware to the Recreation Vehicle (RV) industry. Atwood Mobile Products had $330 million in sales last year and it is headquartered in Elkhart, IN.
Myers Industries Shareholders Approve Acquisition by GS Capital Partners
Myers Industries shareholders voted this week to approve the previously announced acquisition of Myers Industries by Myers Holdings Corp., an entity controlled by Goldman Sachs private equity fund GS Capital Partners. The acquisition is for cash consideration of $22.50 per share, or total consideration, including the assumption of debt, of approximately $1.1 billion.
Continental AG, TRW Submit Bids for Siemens VDO Above $16.5 Billion Each
Continental AG and US automotive supplier TRW, which is backed by private equity company Blackstone, over the weekend submitted bids for Siemens AG’s unit VDO that are each above $16.5 billion, Handelsblatt reported, citing sources within the financial industry.
Eaton to Sell Automotive Mirror Controls Business
Diversified industrial manufacturer Eaton Corp. has signed a definitive agreement to sell its Mirror Controls Division to funds managed by private equity firm Englefield Capital for $111 million. The transaction is subject to customary closing conditions and is expected to close within the next 30 days. The business produces mirror actuators and power-fold actuators for exterior automotive mirror systems. Sales in 2006 were approximately $135 million.
One of Delphi’s Main Investors Expected to Drop Out
Cerberus Capital Management is expected to withdraw its plans to invest in Delphi Corp., just as the auto supplier prepares to emerge from bankruptcy protection, Delphi said in a statement Thursday. Cerberus was one of five firms planning to invest a total of $3.4 billion for a majority stake in a reorganized Delphi. The private equity firm, which is buying Tower Automotive and has shown interest in the Chrysler Group, hasn’t officially backed out of the deal, Delphi said.