Delphi files bankruptcy reorganization plan
Delphi Corp., the biggest U.S. auto parts maker, filed a reorganization plan Thursday that called for the company to receive as much as $7 billion in bank financing and to exit bankruptcy by Jan. 1.
The proposed plan includes a settlement that resolves all outstanding issues between Delphi and its former parent, General Motors Corp., and provides details on a rights offering for shareholders, the Troy, Mich.-based company said.
The plan must be approved by U.S. Bankruptcy Judge Robert Drain.
The filing ends a 23-month legal process started Oct. 8, 2005, when then-Chief Executive Steve Miller put Delphi’s money-losing U.S. operations under bankruptcy court protection after failing to receive financial aid from GM and wage concessions from six of its unions, including the United Auto Workers.
Delphi is in the process of lining up the $7 billion in financing from various banks, the company said.
“I think the market will be open to high-quality debt issuers including Delphi,” said Kirk Ludtke, an analyst at CRT Capital Management in Stamford, Conn.
The plan calls for Delphi to issue new stock and pay GM $2.7 billion in cash to settle all claims the automaker has against the company.
Delphi still plans to close, consolidate or sell 25 of 33 manufacturing sites.
GM said in an Aug. 7 filing that it expected retirement and other costs for former GM workers at Delphi to total $7 billion.
In addition, after an initial payment of $500 million, GM said it would have continuing labor-related costs of $300 million to $400 million annually for an unspecified time and “transitional” payments of an additional $100 million.