GM prepared to give Delphi more funding for Chapter 11 exit

Delphi Corp. announced on 5th March that it is taking the steps necessary to enable the completion of its exit financing syndication. Delphi said that it has been advised by General Motors that GM is prepared to provide additional exit financing.
 
The company's $6.1 billion exit financing package is now expected to include a $1.6 billion asset-backed revolving credit facility, at least $1.7 billion of first-lien term loan, and up to $2.0 billion first-lien term note to be issued to GM (junior to the $1.7 billion first-lien term loan), and an $825 million second-lien term loan, of which any unsold portion would be issued to GM.
 
Delphi believes that GM's increased participation in the exit financing structure is necessary to successfully syndicate its exit financing on a timely basis and is consistent with its First Amended Joint Plan of Reorganization ("the Plan") and the investment agreement with its plan investors. However, some of Delphi's plan investors have advised the company they believe the proposed exit financing with increased GM participation would not comply with conditions in the company's investment agreement between Delphi and the plan investors.
 
To clarify that GM's increased participation complies with the Plan and the investment agreement, and to require each of the Plan Investors to perform their obligations under the investment agreement, Delphi filed a motion in the Bankruptcy Court on 5th March seeking limited relief from the Court under section 1142 of the Bankruptcy Code with respect to the Plan, which was confirmed by the Court on Jan. 25, 2008.
 
Delphi's lead plan investor has also agreed to extend from 31st March to 5th April the first date by which it could terminate the investment agreement with Delphi if the effective date of the Plan has not occurred, which would provide Delphi additional time to comply with closing conditions under the investment agreement.
 
- The U.S supplier Dura Automotive Systems Inc. announced on 7th March the filing of a revised chapter 11 plan of re-organization with a US bankruptcy court, detailing how the company intends to treat more than $1.3 billion in claims, in the light of changed economics since the company¡¯s first plan of reorganization was filed in August 2007. Funding for the revised plan will include a committed $80 million second lien debt facility provided by some of the company's creditors, in addition to a $150 million first lien term loan.
From: auto industry.uk/news

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