DETROIT (Reuters) - Delphi Automotive filed to raise up to $100 million in an initial public offering, the U.S. auto supplier said in a securities filing on Wednesday, less than two years after emerging from bankruptcy.
The proceeds of the offering will be used primarily to fund Delphi’s operations, acquire capital equipment and repay debt. The amount is preliminary and could change.
People familiar with the matter have said the IPO could range from $1 billion to $1.5 billion.
Members of Delphi’s board of directors, which includes Chief Executive Rodney O‘Neal, are eligible to receive a $275,000 cash bonus if Delphi’s value exceeds $6 billion after an IPO, according to the filing.
If the company’s value does not exceed this amount, the directors will not receive an award. Delphi said the award was designed to “incentivize engagement and performance which results in a successful initial public offering.”
“Assuming that the offering is priced at the midpoint of the range set forth on the cover of this prospectus, we expect the implied company value to exceed $6 billion,” Delphi said in its filing with the U.S. Securities and Exchange Commission.
Delphi’s S-1 filing did not include the number of shares or price range of the IPO. Typically, those details appear in later filings with the SEC.
People familiar with the matter said last week that Delphi, the No. 6 auto supplier in North America in 2010, could be valued at more than $10 billion in an IPO. One source said Delphi could command a market valuation between $12 billion and $14 billion.
The IPO of Delphi -- a former affiliate of General Motors Co (GM.N) and still a major supplier for the top U.S. automaker -- comes as the U.S. auto industry emerges from the punishing downturn of the late 2000s.
Other companies in the auto sector, including Allison Transmission Holdings, are setting up their own share offerings following GM’s blockbuster IPO last year. Chrysler Group LLC FIA.MI is also planning an IPO that could come this year or next.
The No. 1 U.S. auto supplier when it filed for bankruptcy in 2005, Delphi succumbed to high costs for wages and legacy benefits inherited in its spinoff from GM in 1999 along with low- or no-margin businesses.
Delphi emerged from a four-year bankruptcy in late 2009. General Motors and hedge funds Silver Point Capital LP and Elliott Management took a controlling stake in the company.
Since 2005, Delphi has whittled down its business and simplified its capital structure. It exited 11 businesses and streamlined its product lines to 33 from 119.
Delphi also cut its global headcount by 27 percent, including temporary workers. Ninety-one percent of its hourly workforce is located in “low-cost countries” and about 30 percent of its hourly employees are temporary workers, Delphi said in the filing.
In March, Delphi bought back stakes in the company held by GM and the Pension Benefit Guaranty Corp for about $4.4 billion in a bid to simplify its capital structure.
Goldman Sachs (GS.N) and JPMorgan Chase (JPM.N) are among the underwriters of the IPO, according to the filing. Other underwriters include Bank of America (BAC.N), Barclays Capital (BARC.L), Deutsche Bank (DBKGn.DE), Citigroup Inc (C.N) and Morgan Stanley (MS.N).
The company intends to list its shares under the symbol “DLPH.”
Reporting by Deepa Seetharaman; Editing by Matthew Lewis, Phil Berlowitz