Sources say that Delphi Automotive, the reorganized former parts unit of General Motors Co., intends to set the terms for its initial public offering. The sources also said that the pitch to investors will start next week. It’s believed that the supplier will be seeking $550 million in the IPO. A source said that it’s likely that the shares will be priced on Nov. 16 and that trading will start the following day.
It was also reported that Delphi hoped to raise over $1 billion. Delphi is proceeding with its IPO even as the global markets have yet to recover.
Last September, billionaire Wilbur Ross has decided to postpone the offering of his International Automotive Components Group until January at least. Delphi either canceled or delayed IPOs that amount to $8.9 billion in the third quarter and $34 billion for the first nine months.
Jim Hall, a principal of 2953 Analytics Inc., a Detroit consulting firm, said that cash is running out so the company would have “to strike now while the iron is warm.”
Delphi, which had once been the biggest U.S. auto-parts maker, had emerged from bankruptcy in October 2009. Since then, Delphi has improved its profitability and cut its reliance on its former parent. It was also able to expand in fast-rising emerging markets. [source: Autonews]