Delphi files for potential amendments to reorganization plan

Delphi files for potential amendments to reorganization plan

	Published : Tue, 30 Oct 2007 14:47 By : Agencies Print this Story

NEW YORK (Thomson Financial) - Delphi Corp. Tuesday said it's filed a notice of potential amendments to its reorganization plan with the U.S. Bankruptcy Court.

The company said the amendments reflect: 'current market conditions commensurate changes to our proposed emergence capital structure and form of plan currency contemplated for stakeholder distributions, and an effective reduction of less than five percent in plan value to reflect macroeconomic and industry conditions and uncertainties.'

Specifically, Delphi said the amendments contemplate a reduction of $2 billion in the company's planned net debt at its emergence from bankruptcy protection.

The amendments also say the company's arrangement with General Motors could change with GM still recovering $2.7 billion but with the cash component of this being reduced to $750 million. Previously, GM was to get the entire $2.7 billion in cash. Delphi's potential amendment would provide $750 million in cash, a second lien note of $750 million and $1.2 billion in junior convertible preferred stock.

Other potential amendments include investors in the reorganization plan, which are led by Appaloosa Management L.P., seeing reductions in the assumed enterprise value of their investments in both common and preferred stock.

Also, existing common shareholders with par value rights to acquire a total of about 12.7 million shares of new common stock would see the purchase price for those shares reduced to $41.58 each from $45 under another amendment. Existing shareholders, however, would get warrants to acquire $1 billion in new common shares at $45 each under the amendments, rather than 5% of the total of new common shares, as the plan currently provides.

Delphi said the potential amendments are supported by its creditors' committee and the investors in its reorganization plan but it said the equity committee has stated it will no longer support the plan if it's amended to reduce recoveries to common shareholders as contemplated.

Michael Baron

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