Delphi Announces Filing of Potential Amendments to Disclosure Statement and Reorganization Plan
Delphi Also Files Amendments to Plan Investment Agreement and GM Settlement
TROY, Mich. -- Delphi Corp. (OTC:DPHIQ) announced that it filed last evening potential amendments to its Joint Plan of Reorganization and related Disclosure Statement with the U.S. Bankruptcy Court for the Southern District of New York. The notice of potential amendments was filed in accordance with a timetable established by the Bankruptcy Court for the resumption on Nov. 8, 2007 of the Disclosure Statement hearing commenced earlier this month on Oct. 3, 2007. The filing, which remains subject to further amendment by the Company on Nov. 7 pursuant to the Bankruptcy Court’s scheduling order, also included amendments to the Global Settlement Agreement and Master Restructuring Agreement between Delphi and General Motors Corp. and to the Investment Agreement with Delphi’s Plan Investors which are led by an affiliate of Appaloosa Management L.P.
Delphi also filed a separate motion last evening seeking approval of the proposed amendment to the Investment Agreement at the Nov. 8, 2007 hearing. The proposed Investment Agreement amendment, which has been executed by Appaloosa and a supermajority of the Plan Investors, is subject to the satisfaction of various conditions including Appaloosa’s approval of exit financing terms under discussion with the Company’s principal lead lenders and execution of the amendment by one additional plan investor prior to the Nov. 8 hearing.
“Last evening’s filings represent further substantial progress in our Chapter 11 cases in a challenging capital markets environment,” said John Sheehan, Delphi vice president and chief restructuring officer. “These very focused potential 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.”
The potential amendments contemplate an approximate $2 billion reduction in the Company’s net debt at emergence. Further, the potential amendments reflect reductions in stakeholder distributions to some junior creditors and interest holders required to obtain consensus among Delphi’s Creditors’ Committee, Plan Investors and settling parties, and changes required by our Plan Investors and settling parties to obtain their endorsement of the Plan and Disclosure Statement, the Company’s settlements with GM and its US labor unions, the Company’s emergence business plan and related agreements.lthough the potential amendments are supported by the Creditors’ Committee, GM and the Plan Investors, Delphi has been advised by the Equity Committee that it will no longer support the Company’s Plan if amended to reduce recoveries to common stockholders as contemplated in the potential amendments. Absent a consensual resolution of the Equity Committee’s concerns, the Committee is expected to file objections to the Disclosure Statement and Plan, seek a further adjournment of the continued Disclosure Statement hearing and current emergence timetable, and seek other relief from the Bankruptcy Court. Delphi will continue to work towards a consensus among its principal stakeholders, including the Equity Committee, however, the likelihood of such an outcome was speculative and not assured.
A copy of the potential amendments and the Investment Agreement Amendment Approval Motion and related pleadings can be obtained at www.delphidocket.com.
ABOUT DELPHI’S CHAPTER 11 CASE
Delphi’s Chapter 11 cases were filed on Oct. 8, 2005, in the United States Bankruptcy Court for the Southern District of New York and were assigned to the Honorable Robert D. Drain under lead case number 05-44481 (RDD).
The Adequacy Hearing for the Disclosure Statement began on Oct. 3, 2007 and is scheduled to continue on Nov. 8, 2007. The brief adjournment allowed Delphi to continue to negotiate potential Plan of Reorganization (POR) amendments with key stakeholders, make appropriate amendments to both the GM settlement documentation and the Equity Purchase Commitment Agreement (EPCA), and continue discussions with potential exit lenders. Approval of the Disclosure Statement and related voting solicitation procedures permits the company to solicit acceptances of the proposed Plan of Reorganization later this year and seek confirmation of the Joint Plan of Reorganization by the Bankruptcy Court during the first quarter of 2008.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
More information on Delphi’s U.S. restructuring and access to court documents, including all of the documents referenced in this press release and other general information about the Chapter 11 cases, is available at www.delphidocket.com. Information on the case can also be obtained on the Bankruptcy Court’s website with Pacer registration: http://www.nysb.uscourts.gov. For more information about Delphi and its operating subsidiaries, visit Delphi’s website at www.delphi.com.
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