DETROIT General Motors (GM) announced the sale of its Class A Membership Interest in Delphi Automotive LLP (Delphi) back to Delphi for $3.8 billion. GM acquired the stake in the business in October 2009 in conjunction with the creation of the new Delphi Automotive as part of its Chapter 11 bankruptcy reorganization plan.
“We are systematically delivering on our commitment to strengthen and simplify our balance sheet,” said Dan Ammann, GM senior vice president and CFO. Delphi also purchased the Class C interests owned by the Pension Benefit Guaranty Corp. (PBGC) for $594 million. These transactions, funded with cash on the company’s balance sheet and $2.5 billion of new bank debt as part of a $3 billion credit facility provided by J.P. Morgan Securities LLC, fully retire the ownership shares acquired by GM and the PBGC in connection with Delphi’s acquisition by a group of private investors in October 2009.
Based on these transactions, the company says it now has “an efficient capital structure and a prudent level of debt.”