Delphi has accepted a proposal for an equity purchase and commitment agreement with affiliates of Appaloosa Management, Cerberus Capital Management and Harbinger Capital Partners Master Fund I, as well as Merrill Lynch & Co. and UBS Securities to invest up to $US3.4bn in preferred and common equity in the reorganised Delphi to support the company's transformation plan announced on 31 March, 2006 and its plan of reorganisation framework agreement.

The plan framework support agreement, signed by Delphi, the plan investors and General Motors, outlines the expected treatment of the company's stakeholders in its anticipated plan of reorganisation and provides a framework for several other aspects of the company's Chapter 11 bankruptcy reorganisation.

Separately, Delphi accepted a proposal from JPMorgan Chase Bank, NA and a group of lenders to refinance in full the company's existing $2.0bn DIP facility and approximately $2.5bn pre-petition revolver and term loan facilities. In recognition of the favourable environment in the capital markets and to minimise transaction fees payable by Delphi, the company has accepted the lenders' undertaking on a best efforts basis without underwriting by the lenders.

The company is filing motions seeking approval of the agreements with the US Bankruptcy Court of the Southern District of New York and will be filing the relevant agreements this week with the Securities and Exchange Commission. The Bankruptcy Court has scheduled a hearing to consider approval of the plan investment, plan support and DIP refinancing agreements on 5 January 5.

"[The] agreements represent significant milestones in Delphi's reorganisation and another major step forward towards emergence from our Chapter 11 reorganisation in the US," said Delphi chairman and CEO Steve Miller.

Miller, brought in in mid-2005 to steer the restructuring, will step down as CEO on 1 January and be succeeded by president and chief operating officer Rodney O'Neal. O'Neal will be president and CEO when Delphi emerges from bankruptcy and Miller will remain chairman until then, expected in mid-2007.