Delphi secures commitment for $300 million more in GM advances

By Caroline Salls

Pittsburgh, Aug. 7 - Delphi Corp. requested court approval to amend an arrangement with General Motors Corp. under which GM has agreed to increase its advances to Delphi by up to $300 million, according to a Wednesday filing with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, GM agreed in May to advance up to $650 million to Delphi to support the company's objective to maintain a minimum of $500 million of liquidity in available funds through the second half of 2008.

The GM arrangement is part of Delphi's debtor-in-possession financing agreement. The amounts being advanced by GM would have otherwise been paid or reimbursed to Delphi if its global settlement agreement and master restructuring agreement would have taken effect as planned in early April.

According to the motion, Delphi has now determined that it needs to further enhance its liquidity through the balance of 2008.

As a result, GM has agreed to increase its advance commitment to $950 million from $650 million, which Delphi said will allow it to maintain a minimum of $300 million of liquidity in available funds.

Under the amended GM arrangement, interest on advances above the original $650 million facility amount will be cancelled if a GM-approved plan of reorganization takes effect before the termination of Delphi's tranche B DIP loan.

In addition, GM can terminate the arrangement amendment if Delphi has not filed amendments to its plan of reorganization and disclosure statement by Oct. 31.

The maturity date for the additional $300 million in advances will be the earliest of Dec. 31, with an option to extend the maturity to June 30, 2009; the date Delphi files a plan disclosure statement that is not acceptable to GM; the termination of Delphi's DIP facility; and on the effective date of a plan of reorganization.

A hearing is scheduled for Aug. 26.

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

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.