Delphi sets indicative float price
DELPHI Automotive indicated a price range for its initial public offering that values the former General Motors parts unit below levels projected six months ago when the stock market was stronger.
Delphi said in a regulatory filing yesterday that the price range for its IPO would be $22 (£13.70) to $24 a share, establishing a value for the company at about $7.55bn. In May, people familiar with the matter said the supplier could be worth $10bn to $14bn.
The offering, which would come about two years after the company emerged from bankruptcy, would raise about $554.3m at the midpoint of the proposed price range, according to the filing. That would be far less than the $1bn it was originally aiming for, sources said.
The company’s shares are expected to begin trading on the New York Stock Exchange on 17 November.
The global auto market has shown signs of a gradual recovery, but investors remain concerned about the strength of demand in the European and North American markets.
Delphi filed for bankruptcy in 2005 after succumbing to high costs for wages and legacy benefits inherited in its spinoff from GM in 1999. It emerged from bankruptcy four years later.