A bankruptcy court judge on Thursday (27 October) approved a US$2bn financing plan for Delphi, which filed for bankruptcy protection earlier this month.
The plan allows the company to pay everyday expenses such as employee salaries, an Associated Press (AP) report said.
The judge reportedly also allowed Delphi to continue shifting money from its US unit to its business units in 40 countries as part of its business activities.
AP said Delphi’s so-called debtor-in-possession financing plan was arranged by a group of banks including Citigroup Inc. and JP Morgan Chase & Co. Investment bank Rothschild Inc. served as advisor to Delphi when the parts maker sought out the backing from Wall Street lenders.
Of that $2 billion, $250 million is a term loan and $1.750 billion is a revolving credit facility.
“I’m hoping they won’t need to draw down on it (the financing) significantly. I’m convinced the facility adequately satisfies the debtor’s needs,” AP quoted judge Robert Drain of US Bankruptcy Court in New York as saying. He referred to the financing approved Thursday as “abundant liquidity.”
The financing package comes on top of $2.6 billion Delphi has borrowed in June and August, The Associated Press noted.
Prior to approving the financing, Drain allowed the company to reject a licence agreement for technology for electric connections in vehicles. The judge also allowed the company to sell assets that are worth less than $10 million.