Auto Supplier Forming REIT to Raise Money

Paula Angelo, manager of financial communications, told GlobeSt.com thatcreating a REIT is not an unusual action. "Historically, companies find a REIT is a cost-effective way to raise funds," Angelo said.

The company hopes to raise up to $345 million through the sale of preferredstock, held up by 14 Delphi properties, Angelo said. Delphi would pay renton the properties, which would then be filtered to the REIT's stockholders.

The REIT, known as Delphi Properties Inc., would have the symbol DPS on theNew York Stock Exchange.

Partly, the REIT creation was an attempt to help pay for pension funds forthe company, Angelo said. The company is contributing about $250 million outof the company's operating cash flow to the pension fund in the secondquarter, she said. The company owed $4 billion to the pension fund at theend of 2002.

Angelo said she could not comment on future plans for the REIT, or whetherthe REIT was a smart investment in the current economy. "Because we are awaiting SEC approval, there's only so much we can discuss about the REIT," Angelo said.

The company's Automotive Holdings Group reported 2001 and 2002 revenues of$3.7 billion and $3.6 billion respectively, and operating losses of ($248)million and ($375) million respectively. Delphi laid off more than 17,000workers in the last two years, and closed five facilities.