Delphi Corp. earlier this year met the conditions of its first amended joint plan of reorganization. But late last week, Delphi’s plan was commenced but not completed. Lindsey Williams, manager of corporate affairs at Delphi, says plan investors disagreed with some involvement of General Motors, but Delphi will work toward a solution. “We will work with our board of directors and statutory committees, as well as GM, to determine the next step,” Williams says. In the meantime, Delphi will continue business as it has for the last two and a half years it has been working through its Chapter 11 filing. “Delphi continues to be well financed, well organized,” Williams says. “Plants continue to operate just as they have for the last two and a half years.” Delphi has met its plan’s conditions, including obtaining $6.1 billion of exit financing. According to Delphi, plan investors delivered a written notice purporting to terminate the Equity Purchase and Commitment Agreement (EPCA) and alleged breaches of the EPCA that the plan investors assert would entitle them to payment of additional compensation under the EPCA from Delphi. J.P. Morgan Securities, Inc. and Citigroup Global Markets, Inc., in accordance with prior orders entered by the United States Bankruptcy Court for the Southern District of New York, arranged the $6.1 billion in exit facilities. According to Delphi, the plan investors that did not fund the investment of up to $2.55 billion in preferred and common equity under the EPCA agreed to in 2007 include affiliates of lead investor Appaloosa Management L.P.; Harbinger Capital Partners Master Fund I, Ltd.; Merrill Lynch, Pierce, Fenner & Smith Inc.; UBS Securities LLC; Goldman Sachs & Co.; and Pardus Capital Management, L.P. John Sheehan, Delphi vice president and chief restructuring officer, says when the closing process commenced, all required parties, including representatives from new exit lenders GM and Delphi’s joint statutory committees, were present and prepared to move forward. “We are extremely disappointed that our plan investors have taken the position that they are not obligated to fund their plan investment commitments to Delphi and instead have chosen to walk away from the company and its stakeholders,” he says. “We are prepared to pursue actions that are in the best interests of Delphi and its stakeholders. These actions will be overseen by a committee of our board of directors, and will not impact the successful operation of the company,” Sheehan continues. “We are very appreciative of the strong financial support from our exit financing lenders and GM, and we look forward to continuing to work with them and our other stakeholders as we move forward with our goal of emerging from Chapter 11 as soon as practicable." Delphi CEO and President Rodney O’Neal reiterates that the company has accomplished its commitments in its restructuring plan. “We are proud of the fact that we have never disrupted our customers’ operations during this reorganization,” he says. “We also have kept the pipeline full of exciting technologies and products to meet the challenges facing our customers – to make vehicles safer, greener and more connected to consumers’ lives than ever before.” Delphi’s transformation initiatives include: “While our plan investors’ actions are very disappointing, it is important that we clearly distinguish their actions from the company’s achievement of its transformation objectives,” O’Neal says. “Our unwavering commitment to our customers, suppliers, employees and other stakeholders will remain at the forefront as we move forward with our Chapter 11 cases, and we are committed to emergence as soon as practicable.” |