DETROIT (AP) -- Auto parts supplier Delphi Corp. said Monday it has accepted a $3.4 billion investment from a group of private equity companies to support its emergence from bankruptcy protection.þþUnder the deal, affiliates of Appaloosa Management LP, Cerberus Capital Management LP and Harbinger Capital Partners Master Fund I, as well as Merrill Lynch & Co. and UBS Securities LLC, would invest the company.þþThe investment group will invest a minimum of $1.4 billion and a maximum of $3.4 billion in the struggling company in exchange for common and preferred stock that will be issued in the first half of next year.þþThe money will be used to fully fund Delphi's pension plan, which at the end of 2005 was underfunded by $4.1 billion, the company said.þþTroy-based Delphi, the nation's largest auto parts supplier, said the agreement was part of a plan to emerge from bankruptcy protection by the second quarter of 2007. A reorganization framework agreement, signed by Delphi, the investors and former parent General Motors Corp., was included in the deal.þþSeparately, Delphi accepted a proposal from JPMorgan Chase Bank and a group of lenders to refinance the company's existing $2 billion debtor in possession credit line and about $2.5 billion in loans.þþ''Today's agreements represent significant milestones in Delphi's reorganization and another major step towards emergence from our Chapter 11 reorganization in the U.S.,'' Delphi Chairman and Chief Executive Officer Robert S. ''Steve'' Miller said in a statement.þþUnder the deal, Delphi will offer 135 million new shares for sale sometime during the first half of next year, the company said.þþIn addition to the new investors, existing shareholders will get rights to buy some of the shares, Delphi said.þþDelphi shares rose 3 cents, or 0.92 percent, to $3.30 in over-the-counter premarket trading Monday.þþDelphi, GM's former parts-making arm that was spun off as a separate company, filed for bankruptcy protection in October 2005. It had 21,600 hourly workers at the end of September, the latest figures available.þþThe parts supplier plans to close or sell 21 of its 29 U.S. plants and focus on operating eight U.S. plants that make electronics, safety systems, heating and air conditioning systems and some mechanical parts. The plants slated for sale or closure make steering systems, brakes, dashboards and other parts that Delphi no longer considers part of its core business.þþDelphi also has asked a court for permission to void previous labor contracts. The company continues to negotiate with GM and Delphi's unions on wage reductions for many of its hourly workers.þþ
Source: NY Times
