Delphi granted interim approval to use $950 million of $2 billion DIP

By Caroline Salls

Pittsburgh, Oct. 12 - Delphi Corp. received interim court approval to use up to $950 million of its $2 billion debtor-in-possession financing from JPMorgan Chase Bank and Citigroup Global Markets, Inc., according to a company news release.

The company also received interim approval of an adequate protection package for its $2.5 billion pre-bankruptcy secured revolving credit facility and term loan facilities.

A final hearing for the motions approved on an interim basis is scheduled for Oct. 27.

The proceeds of the DIP financing together with cash generated from daily operations and cash on hand will be used to fund post-bankruptcy operating expenses, including its supplier obligations and employee wages, salaries and benefits.

The DIP includes a $1.75 billion revolving credit facility, including $325 million for letters of credit and a $250 million term loan facility.

The DIP terminates 45 days after the interim order if the final order has not been made, at maturity 24 months from closing, when Delphi exits Chapter 11 or upon acceleration of the loans.

Interest will be Libor plus 250 basis points.

The letter-of-credit fee is 250 bps.

The overall liquidity available to Delphi will support its global operations outside the United States and help assure the continued adequacy of working capital throughout its global business units, the release said.

In addition, the company obtained approval of all of its first-day motions covering human capital obligations, supplier relations, customer relations, business operations, tax matters, cash management, financing, utilities, case management and retention of professionals.

Delphi, a Troy, Mich.-based automotive electronics manufacturer, filed for bankruptcy on Saturday 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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