Rumor boosts Delphi shares
October 1, 2005
BY MICHAEL ELLIS
FREE PRESS BUSINESS WRITER
Delphi Corp.'s stock shot up nearly 40% early Friday upon rumors that General Motors Corp. and the UAW would announce a deal at an 11 a.m. news conference to bail out the troubled auto supplier, then slipped back after it didn't happen.
The stock climbed to $3.53 in the morning; it closed up 24 cents at $2.76 on the New York Stock Exchange.
Meanwhile, Delphi declined to make a voluntary payment on a loan, and said Friday it was considering talking to lenders to arrange a potential waiver or amendment to the loan. Delphi also said Friday that it will make regular monthly payments to its suppliers by Oct. 4, despite its financial troubles.
Delphi said that it had violated the terms of a $1.8-billion bank loan by failing to meet a financial target that serves as a warning sign of the company's health. As part of a financing agreement reached with lenders this summer, Delphi was required to meet a ratio of secured debt to EBITDA, or earnings before interest, taxes, depreciation and amortization.
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