Delphi Comments on Adjournment to April 2 of Approval Hearing on GM Advance Agreement Amendments and GM Steering Option Exercise Agreement
Delphi and DIP Lenders in Discussions Regarding Consensual Amendment to Accommodation Agreement by April 1
Troy, Mich., — Delphi Corp. (PINKSHEETS: DPHIQ) today said the U.S. Bankruptcy Court adjourned until April 2 approval hearings on previously announced agreements reached between Delphi and General Motors Corporation (GM) to supplement Delphi’s liquidity position and to substantially complete Delphi’s portfolio transformation through the sale of Delphi’s global Steering business. The approval hearings were rescheduled to provide additional time for the U.S. Treasury to evaluate the agreements, which the U.S. Treasury determined yesterday are “material transactions” under its December 31, 2008 loan agreement with GM, and for Delphi to meet and confer with objectors to the approval of the GM Steering Option Exercise Agreement regarding objections not otherwise settled prior to today’s hearing. The sale of the Steering business is a strategic component of Delphi’s transformation strategy, which was announced in March 2006. Pursuant to two amendments to GM’s liquidity advance agreement with Delphi, GM has agreed to increase from $300 million to $450 million the amount it is committed to advance to Delphi. The three agreements remain subject to certain conditions including U.S. Treasury concurrence.
Delphi also said that it is in discussions with its DIP Lenders’ Steering Committee regarding a consensual amendment to the Accommodation Agreement that would, among other matters, reset the timing of certain milestones in the agreement in order to facilitate discussions among representatives of Delphi, the DIP Lenders, Delphi’s Creditors’ Committee, GM and the U.S. Treasury concerning proposed modifications to Delphi’s First Amended Plan of Reorganization confirmed in January 2008. The company said that completion of the amendment process and approval of the motions now scheduled for hearing on April 2nd should facilitate the company’s access to additional liquidity to manage its U.S. operations while providing the company with the liquidity runway to complete discussions with stakeholders and obtain court approval of reorganization plan modifications.
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