Delphi, GM’s biggest auto parts supplier, filed for bankruptcy protection under Chapter 11 in 2005 and announced the launch of exit financing in January. GM is considering a further increase in financing Delphi’s multi-billion dollar pension burden, as the supplier is struggling to meet a restructuring plan confirmed by the bankruptcy court in New York due to tight U.S. credit markets. The Detroit-based parts supplier is seeking extensions on agreement deadlines, and failed to meet its goal of emerging from court protection by the end of 2008′s first quarter.
Delphi seeks $6.1 billion in exit financing, with up to $2.825 billion in first-lien and second-lien term notes from GM, as well as a $2.55 billion equity plan from an Appaloosa Management-led investor group, according to Automotive News. Delphi was given until Friday by investors to finalize financing and the remaining approximate $700,000, which it expects to meet.
In a January statement, Delphi re-adjusted its planned exit facilities from the $6.8 billion authorized by the Bankruptcy Court to around $6.1 billion. In October of 2005, when Delphi filed under Chapter 11, it cited a $22 billion deficit.
