Saturday, December 8, 2007

Judge approves $2.55B infusion for Delphi

A judge in the Delphi bankruptcy case on Friday approved changes to a plan by investors to inject as much as $2.55 billion into the auto parts maker, moving it closer to an exit from court protection.

Hedge fund Appaloosa Management and five other investors would get equity stakes in a reorganized Delphi Corp. They are the lead investors in a plan that is key to the company's ability to emerge from bankruptcy.

The group has twice received the court's approval for different versions of its proposal, and this latest approval was designed to clear the way to a vote on the company's Chapter 11 plan.

Appaloosa founder David Tepper said Thursday, "We made a deal. We're just trying to get it done. We'd like to see this thing come out of bankruptcy, if we can."

The Troy, Mich.-based company had faced opposition to the equity plan from creditors, shareholders and the International Union of Electronic Workers of America, a labor union representing the second largest group of Delphi workers. They had opposed a Nov. 14 proposal that was made to be more favorable to the equity investors led by Appaloosa, at the expense of creditors and current shareholders. But earlier this week, Delphi reached an agreement that cleared the way to the judge's approval.

No comments: