Delphi Corporation has told a bankruptcy court judge it would postpone the start of voting on its reorganisation because of a tough credit market.
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According to the Associated Press (AP), Delphi opened a hearing on Wednesday to ask for permission to begin soliciting votes but asked the judge to delay ruling as it negotiates for $US7.1bn in loans to help it emerge from court protection.
“As a result of uncertainty of the capital markets, we are engaged in reviewing laser-like potential amendments to the plan,” Delphi attorney Jack Butler was quoted as saying, adding that the company was making progress on its negotiations.
The Wednesday hearing was scheduled to continue on 25 October, the news agency said.
The Associated Press said Delphi’s failure to secure the loans could force it to make changes to portions of its restructuring plan, which calls for investors to pour in as much as $2.55bn in capital and the company to take roughly $7.1bn in loans.
AP noted that Delphi has been operating under court protection for two years and, on Wednesday, opened a hearing to get court approval of its disclosure statement, approval of which would allow it to begin gathering votes for its plan.
The plan and disclosure statement were drawn up after resolution of issues involving three major constituents: six labour unions who fought against wage and benefit cuts, investors who will take over the company and the company’s former parent, General Motors, the news agency noted.
AP said Delphi last month resolved all outstanding issues with GM, including a lawsuit filed by Delphi to terminate supply agreements, potential claims stemming from Delphi’s 1999 spin-off and legacy labour costs related to the separation.
The Associated Press added that Delphi expects to hold a hearing to confirm its plan before the end of the year and emerge early next year, which is later than it has predicted in the past. Bankruptcy experts reportedly say most successful reorganisations should take no more than 18 months.
