Delphi receives final approval of $2 billion DIP, $2.5 billion adequate protection

New York, Oct. 27 - Delphi Corp. said it received final bankruptcy court approval for its $2 billion debtor-in-possession credit facility and an adequate protection package for its $2.5 billion pre-bankruptcy revolver and term loan.

The final financing package includes provisions that the court determined also adequately protect customers and suppliers with allowable set-off and recoupment claims and permits them to continue ordinary course business relationships with Delphi.

The DIP facility is via JPMorgan Chase Bank and Citigroup Global Markets, Inc.

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, both at Libor plus 275 basis points.

The DIP terminates at maturity 24 months from closing, when Delphi exits Chapter 11 or upon acceleration of the loans.

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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