Delphi Automotive LLP has acquired the services of Goldman Sachs Group Inc. and JPMorgan Chase & Co. to manage an initial public offering that could raise more than $1 billion, according to a source.
Troy-based Delphi, which was formerly the largest auto-parts maker in the U.S., has also reportedly hired Bank of America Corp., Citigroup Inc., Barclays Plc and Deutsche Bank AG to be its underwriters. The offering is scheduled to take place in the third quarter.
Sources added that the filing may come next week and the IPO may put the value Delphi at around $10 billion. When Delphi exited bankruptcy restructuring in October 2009, it had four classes of shares.
Lenders like private-equity firms Elliott Management Corp. and Silver Point Capital LP bought majority of the original Delphi and still maintain a controlling interest after Delphi moved to buy back stakes from former parent General Motors Co. and the Pension Benefit Guaranty Corp. last March.
David Whiston, an equity analyst with Morningstar Inc. in Chicago, said that Delphi is mostly owned by private equity and “they're not going to hold it forever.” He believes that the company will “sell at a reasonable profit and monetize their investment."
To buy back the stakes and to make its capital structure simpler, Delphi paid $3.8 billion to GM and $594 million to the PBGC. According to Delphi’s Web site, its year-end financial statement indicates that GM's class of shares in Delphi was valued at $2.08 billion as of Dec. 31.