Delphi has been taking significant steps to conserve funds given the coronavirus’s impact on operations, the company says, including temporary layoffs, moving employees to part-time schedules and pay reductions throughout the organization, disciplined inventory management and active past dues collection.
The company also opted to draw upon its full $500 million credit line, a move which BorgWarner claims is a breach of the two companies’ acquisition agreement. According to the agreement, Delphi needed BorgWarner’s prior written consent to access its revolving credit facility. If the breach is not cured within 30 days, BorgWarner claims it has the right to terminate the transaction agreement. Delphi Technologies disputes BorgWarner’s breach assertion on the basis that BorgWarner “unreasonably withheld its consent.”
According to the statements provided by each company, both intend to continue to negotiate to resolve the matter and proceed with the acquisition in the second half of 2020, although an inability to come to an agreement would likely put an end to the deal.