BorgWarner Inc. may back away from its $1.5 billion deal for Delphi Technologies Plc after the latter auto-parts supplier tapped out its credit line without receiving permission from its acquirer.
Delphi drew down its full $500 million revolving credit facility to position for the downturn related to the coronavirus pandemic, the Gillingham, England-based parts maker said Tuesday. BorgWarner gave Delphi notice that this breached their agreement announced in January and that it has 30 days to resolve the issue.
BorgWarner said it received a response letter from Delphi disputing its breach assertion, claiming BorgWarner unreasonably withheld its consent to the revolver draw.
“Both companies continue to believe in the long-term strategic value of the transaction and are still working together towards closing the transaction in the second half of 2020,” Delphi said. “There can be no assurance, however, that BorgWarner and the company will reach a mutually acceptable…