November 7, 2011 4:20 PM

Davis Polk, Skadden Grab Wheel for Delphi's $550 Million IPO

Posted by Brian Baxter

Two years after emerging from bankruptcy court, auto parts supplier Delphi Automotive set the terms Monday of an initial public offering to raise more than $550 million.

Delphi stock is priced to begin trading between $22 and $24 a share, according to a company filing with the SEC on Monday. The price range would value the company as high as $7.55 billion, according to Reuters, which notes that Delphi's stock is expected to start trading the week of November 14.

Delphi was spun off from General Motors in a $1.7 billion IPO in 1999. But the parts maker lost money as its customers, including GM, slashed orders. Delphi filed for bankruptcy in October 2005 in order to shed liabilities from mounting pension and health care obligations to former employees. The company spent four years in Chapter 11 proceedings before it was sold at auction in 2009 to a group of private equity firms.

With its business outlook improving, Delphi bought back a $3.8 billion stake in the company from GM in March and filed registration papers with the SEC in May for an upcoming IPO.

Delphi estimates legal fees and expenses for its IPO to be $2.8 million, according to an S-1 filing by the company with the SEC on Monday.

Davis Polk & Wardwell global capital markets cohead Michael Kaplan in New York is advising Troy, Michigan-based Delphi. The firm previously advised Delphi's agent bank, JPMorgan Chase, during the company's four years in Chapter 11. Carey Olsen is serving as offshore counsel to Delphi on the IPO. The company's general counsel is David Sherbin.

Skadden, Arps, Slate, Meagher & Flom corporate finance partner Richard Aftanas is representing underwriters on the IPO led by Goldman Sachs and JPMorgan. The firm previously served as lead counsel to Delphi during its bankruptcy, which ended in October 2009. Skadden made more than $100 million in fees from the Chapter 11 case, according to an April 2010 feature story from The American Lawyer on the firm's role representing Delphi.

Most of the stock in Delphi is being sold by Paulson & Company, the hedge fund headed by John Paulson, which owns about 22 percent of the company, according to The Detroit News. Paulson intends to reduce its stake in Delphi to 15.8 percent.

Delphi's IPO comes almost a year after an offering for GM, which raised more than $23 billion in a public listing after the automaker concluded its own bankruptcy proceedings.

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