Delphi, GM agree on plan

Delphi said it will work to gain approval from groups that oppose its plan.

DETROIT (AP) — Delphi Corp. has agreed with General Motors Corp. and an investment group on a revised plan that would enable the auto parts maker to leave bankruptcy protection with $5.2 billion in financing, Delphi said Thursday.

But Delphi said its creditors’ and equity committees still oppose the amended plan.

The new plan, filed in U.S. Bankruptcy Court in New York, is smaller than a plan released Sept. 6, which called for $7.1 billion in exit financing, the Delphi statement said.

“Today’s filings, which have been agreed upon by GM and all of our plan investors, are the cornerstones of a plan of reorganization that we believe can be achieved during this challenging capital markets environment,” John Sheehan, Delphi’s chief restructuring officer, said in a statement.

Delphi Packard Electric employs about 1,900 hourly and salaried workers in the Mahoning Valley.

The plan’s investment group is led by an affiliate of the private equity firm Appaloosa Management LP.

Delphi said in its statement that it would continue to work toward getting a consensus for the amended plan among its stakeholders, including its creditors’ and equity committees.

Delphi, GM’s former parts-making operation spun off as a separate company, filed for bankruptcy protection in October 2005. The company had hoped to emerge from Chapter 11 by the end of 2007, but because of the tight credit market, it now expects that to take place in the first quarter of next year.

Earlier this month, the company reported that its third-quarter net loss narrowed due to smaller expenses related to its reorganization under bankruptcy protection, but it continued to struggle against the effect of auto industry production cuts in North America.

Troy-based Delphi lost $1.2 billion, or $2.08 per share, compared with a loss of $2 billion, or $3.51 per share, in the third quarter of 2006.

The auto parts supplier’s loss includes an accrual of $369 million for interest expenses related to its bankruptcy reorganization plan, $124 million for charges for warranty matters and $112 million in costs including benefits for employees who have been let go.