Delphi secures fifth amendment to DIP lender accommodation agreement

By Caroline Salls

Pittsburgh, June 9 - Delphi Corp. has entered into a fifth amendment to the accommodation agreement with its debtor-in-possession facility lenders, according to an 8-K filed Tuesday with the Securities and Exchange Commission.

Under the fifth amendment, the accommodation period will terminate on June 13 if a majority of the tranche A and tranche B DIP lenders and a majority of all lenders who signed the accommodation agreement do not notify Delphi by June 12 that its term sheet outlining a resolution of issues related to General Motors Corp.'s contributions is satisfactory.

The agreement was previously set to expire on June 9 if the required lender consent was not received by June 8.

In addition, the lenders now have 25 business days from June 1 to review and decide whether to approve proposed changes to the company's plan of reorganization, extended from 10 business days from June 1.

The fifth amendment also postpones the date by which tranche C interest payments must be made to June 12.

These payments must be applied to repayments of principal amounts outstanding under the tranche A and tranche B facilities.

As previously reported, the DIP lenders have agreed to allow Delphi to continue to use the proceeds of the DIP facility and to forbear from exercising their default-related rights until June 30.

Delphi said there is $230 million outstanding under the tranche A facility, $311 million outstanding under the tranche B term loan and $2.75 billion outstanding under the tranche C term loan.

If specified accommodation agreement milestones are not met, Delphi will be required to apply the $47 million currently held as cash collateral to pay down part of the tranche A and tranche B loans.

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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