General Motors might be in some financial trouble of its own – having filed for Chapter 11 bankruptcy protection earlier this week – but the Detroit automaker will lend a helping hand to its former Delphi unit to get the parts supplier out of bankruptcy.
According to Automotive News, GM will give Delphi $2.5 billion to help it emerge from Chapter 11 protection. Platinum Equity – a private equity firm – will kick in another $750 million and gain control of bankrupt parts supplier.
Under the terms of the new deal, Parnassus Holdings II LLC – a subsidiary of Platinum Equity – will actually own and run Delphi’s business, both in the United States and abroad. In total, Delphi will emerge with $3.6 billion in capital, but it remains unclear what sources will provide the remaining $350 million.
GM has already agreed to run five of Delphi’s plants. GM has received more than $33 billion from the U.S. and Canadian governments to finance its bankruptcy.
Delphi has been in Chapter 11 protection for the past four years.
