(The item "Delphi In Pacts To Emerge From Bankruptcy
Protection," published at 12:29 p.m. EDT, incorrectly stated in the
second paragraph that a previous deal fell apart in April. In fact,
that previous deal fell apart in April 2008. A corrected version
follows.)
DOW JONES NEWSWIRES
Just as former parent General Motors Corp. (GM) enters
bankruptcy proceedings, Delphi Corp. (DPHIQ) reached agreements
allowing it to emerge from bankruptcy protection ahead of its
Tuesday deadline.
Delphi filed for bankruptcy in October 2005. It was poised to
exit from Chapter 11 last year with a $2.55 billion investment by a
group of investors, but they terminated the deal in April 2008.
Delphi later floated a new restructuring plan but was forced to
ditch it as the financial crisis set in and auto sales
cratered.
In May, a judge ordered mediation for the auto supplier and key
players to resolve the case. That order came after Delphi had been
negotiating for nearly two months with GM, lenders and the Treasury
Department's auto task force. Delphi remains one of GM's biggest
suppliers.
"After an extended period of complex and challenging discussions
with a wide range of stakeholders, we are confident that these
modifications to our confirmed plan of reorganization will provide
a resolution that will allow Delphi to emerge from Chapter 11,"
said President and Chief Executive Rodney O'Neal.
The auto supplier will emerge from its reorganization via a sale
of assets to a Platinum Equity LLC affiliate and with the support
of a GM affiliate, which will buy some of Delphi's plants. GM will
provide $250 million of pre-emergence liquidity through July
31.
The plan is similar to the previously confirmed plan. However,
Delphi agreed to allow Parnassus Holdings II LLC, the Platinum
Equity affiliate, to operate its businesses with capital and
commitments of $3.6 billion. In addition, the business will operate
without the labor-related legacy costs related to the North
American sites being acquired by the GM affiliate.
The delay in April 2008 prevented Delphi from funding its
defined-benefit pension after emergence. Under the new plan, GM
will address the hourly pension plan, but Delphi found no feasible
alternatives for its salaried pension. As a result, the U.S.
Pension Benefit Guaranty Corp. will likely take over the plan.
The final approval hearing is set for July 23.
Delphi shares recently trading on the Pink Sheets at 7.8 cents,
down 13%.
-By Jay Miller, Dow Jones Newswires; 201-938-2331;
jay.miller@dowjones.com
(David McLaughlin contributed to this report.)