Delphi names credit bid from banks led by JPMorgan winner of auction

New York, July 27 - Delphi Corp. said that a pure credit bid from JPMorgan Chase Bank, NA as administrative agent under its May 2008 credit agreement is the winner of the company's auction.

The decision was made by Delphi's board after a two-day sale process and consultations with the official committee of unsecured creditors and the company's largest U.S. union.

Delphi said the credit bid is also supported by General Motors Co.

It is based on a "transaction structure" similar to that announced on June 1 with Parnassus Holdings, LLC, an affiliate of Platinum Equity Capital Partners, LP, and GM Components Holdings, LLC, a GM affiliate.

Delphi also announced that GM and its debtor-in-possession facility lenders have agreed to modify their financing agreements to provide sufficient liquidity through a combination of loans from GM, Delphi's use of certain cash collateral accounts pledged to the DIP lenders and the repatriation of excess liquidity from Delphi's global affiliates.

Completion of the credit bid transaction will satisfy amounts owed by Delphi and its affiliates to its DIP lenders.

The bid must be reviewed and approved by the U.S. Bankruptcy Court for the Southern District of New York.

Objections are due by 5 p.m. ET on July 28. The hearing on modifying the company's plan of reorganization to incorporate the credit bid will begin on July 29. If the modified plan is not approved, then the credit bid will be implemented through a section 363 sale.

Delphi said it has resolved a number of potential objections to the modified plan ahead of the hearing, including those filed by some DIP lenders and the administrative agent, the creditors' committee, Wilmington Trust Co. as indenture trustee, the Pension Benefit Guaranty Corp., various state and federal agencies and other parties.

The credit bid transaction resolves more than 600 severance-related objections filed with respect to the modified plan by providing for the assumption and payment of severance obligations, including an option for payment of 75% of a former employee's remaining severance obligation in a lump sum prior to the effective date of the modified plan.

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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