July 23, 2007

Auto parts manufacturer Delphi Corp. accepts new proposal for an Equity Purchase and Commitment Agreement.

On July 18, it was announced that auto parts manufacturer Delphi Corp. has accepted a new proposal for an Equity Purchase and Commitment Agreement with affiliates of lead investor Appaloosa Management L.P.; Harbinger Capital Partners Master Fund I, Ltd.; Merrill Lynch, Pierce, Fenner & Smith Inc.; UBS Securities LLC; Goldman Sachs & Co.; and Willkie client Pardus Capital Management, L.P. (the "Plan Investors") to invest up to $2.55 billion in preferred and common equity in the reorganized Delphi.   The investment, which remains subject to approval by the Bankruptcy Court, is expected to support the company's previously announced transformation plan and its plan of reorganization. 

Under the terms of the Equity Purchase and Commitment Agreement, the Plan Investors will commit to purchase $800 million of convertible preferred stock and approximately $175 million of common stock in the reorganized company.   They will also commit to purchasing any unsubscribed shares of common stock in connection with an approximately $1.6 billion rights offering that will be made available to existing common stockholders subject to approval of the Bankruptcy Court and satisfaction of other terms and conditions.  The Investment Agreement also reflects Delphi's earlier pledge to continue its salaried and hourly defined benefit U.S. pension plans and provides for fulfilling required contributions to the plans that were not made in full during the Chapter 11 process. 

Headquartered in Troy, Michigan, Delphi Corp. is a leading global supplier of mobile electronics and transportation systems, including powertrain, safety, steering, thermal, and controls & security systems, electrical/electronic architecture, and in-car entertainment technologies.    With sales of $26.4 billion in 2006, it has approximately 171,000 employees and operates 159 wholly owned manufacturing sites in 36 countries.

The matter is being handled by partners Myron Trepper, Rachel Strickland, Morgan Elwyn, and Robert Stebbins; and associates Brian Guiney, Jeffrey Letalien and Jeffery Fang.