Delphi seeks to retain KeyBanc as financial adviser

By Reshmi Basu

New York, Sept. 13 - Delphi Corp. asked for court approval to retain KeyBanc Capital Markets Inc. as its financial adviser and investment banker, according to a Thursday filing with the U.S. Bankruptcy Court for the Southern District of New York.

According to the motion, KeyBanc Capital Markets has been hired to formulate, analyze and negotiate options regarding the sale of the company's bearings business, located in Sandusky, Ohio.

Under the proposed payment agreement:

• KeyBanc Capital Markets will receive a transaction fee equal to the greater of $750,000 or 1.25% of the total amount of cash paid for the bearings business;

• KeyBanc Capital Markets will be paid 50% of the stated transaction fee in the event that the sale is consummated; and

• If the transaction does not close, but if Delphi gets a payment from the potential buyer, it will give KeyBanc Capital Markets cash equal to 25% of that compensation.

In addition, Delphi will indemnify KeyBanc Capital Markets against any losses, claims or liabilities.

The fees "are fair and reasonable in light of industry practice and market rates both inside and outside of the Chapter 11 cases," the company said in the motion.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Oct. 8, 2005. Its Chapter 11 case number is 05-44481.

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