Delphi plan investors amend equity commitment to reflect plan filing, union and GM agreements

By Caroline Salls

Pittsburgh, Dec. 11 - Delphi Corp.'s plan of reorganization investors have agreed to amend their equity purchase commitment agreement (EPCA) to reflect the filing of Delphi's business plan, plan of reorganization and disclosure statement, union agreements and General Motors Corp. settlement, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

As previously reported, the plan investors include Appaloosa Management LP, Harbinger Capital Partners Master Fund I, Ltd., Pardus Capital Management, LP, Merrill Lynch, Pierce, Fenner & Smith, Inc., UBS Securities LLC and Goldman Sachs & Co.

Delphi said the amendments revise a number of provisions in the EPCA to reflect developments that have occurred since Aug. 3, including Delphi's delivery of a revised business plan; agreements with principal labor unions and the execution and amendment of settlement agreements with General Motors Corp.; the execution of a best efforts financing letter and the filing of a plan of reorganization and disclosure statement.

Delphi said the amendment modifies provisions relating to the discount rights offering, including the replacement of existing common stockholders with unsecured creditors and makes changes to reflect economic changes for recoveries provided under the plan of reorganization and a post-emergence capital structure, which includes series C preferred stock to be issued to GM.

According to the 8-K, The EPCA amendments remove or narrow the scope of some agreement closing conditions, including changing the deadline for a no-strike condition; reducing the net debt requirement under a capitalization condition; and excluding the already filed disclosure statement, GM settlement agreements and business plan from a condition relating to the approval of investment documents.

However, the 8-K said the investors have also added some closing conditions, including investor release requirements; requiring Delphi to have $1.4 billion in undrawn availability, including a letter-of-credit carve out and reductions under a borrowing base formula; requiring the company to demonstrate and certify that the interest expense on Delphi's debt will not exceed $585 million in 2008, that scheduled Pension Benefit Guarantee Corp. liens are withdrawn and that there are no more than $1.45 billion of trade and unsecured claims against the company.

Delphi has also amended its rights agreement to ensure that the EPCA amendment does not trigger series A preferred stock purchase rights under the rights agreement.

Delphi's disclosure statement was approved on Friday. The plan confirmation hearing is scheduled to begin on Jan. 17.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005 in the U.S. Bankruptcy Court for the Southern District of New York. Its Chapter 11 case number is 05-44481.

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