Delphi is widely reported to have reached a deal with its lenders and ex-parent GM over a new plan that would lift the company out of bankruptcy.
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The accord was reportedly struck on Thursday, ahead of a Friday deadline for a bid from the lenders.
It supersedes a deal that Delphi and GM had reached with Platinum Equity, a private equity firm that had agreed to take over much of the supplier’s business. The lenders forced Delphi to consider other offers.
If approved by the Federal Bankruptcy Court in Manhattan, the agreement would bring an end to Delphi’s nearly four years of Chapter 11 bankruptcy proceedings.
“Lenders have assembled a management team to operate the debtors’ businesses, conducted negotiations with GM and lined up financing,” a creditors group led by New York hedge fund Elliott Management Corp. said in a court filing.
Several investment funds that own parts of the $3.5 billion loan Delphi is using to fund its operations while in bankruptcy said they intend to bid by forgiving debt they are owed, a process known as credit bidding, Dow Jones noted.
Many of the terms of the deal reached Thursday are said to be similar to one proposed by Delphi in April, which the lenders then rejected.
It is reported that the lenders would bring in a team of turnaround professionals and former Delphi executives to oversee the supplier’s restructuring and operations.
