From Detroit Free Press

TROY, MI -- In an effort to bring two key stakeholders back on board in its Chapter 11 reorganization, Delphi Corp. plans to boost its stock payout to unsecured creditors and shareholders.

The changes are the third revisions Delphi has made to its three-month-old plan as the company tries to win an exit loan in a tight credit market and, at the same time, balance the interests of creditors and shareholders who would vote on the plan.

Previous changes drew objections from those groups as the company scaled back payouts to creditors and shareholders to lower its debt.

Delphi said it now has the support of those groups. But the revisions would mean that other parties would see their recovery or their claims against Delphi decline.

Here is how some key stakeholders would fare under the revised plan:

--Current shareholders: Would receive 469,720 shares of common stock and three sets of rights -- expiring in six months, seven years and 10 years -- to buy shares at $59.61 and at 9 percent and 21 percent premiums.

--Unsecured creditors: Would see 77.3 percent of their claims in the form of new stock, instead of 75 percent. The rest would be in the form of rights to buy Delphi shares at $38.39, a 35.6 percent discount. In September, unsecured creditors were slated to receive 80 percent of their claim in stock and 20 percent in cash.

--Bondholders: Certain bondholders who in previous versions expected to be paid in full, would see 90 percent of their claims.

--Investors: A group of investment banks and private-equity groups willing to invest up to $2.55 billion in the company through purchases of preferred and common stock, would buy that stock at lower discounts than the previous proposed plan.

--Class-action plaintiffs: Shareholders involved in a class-action suit accusing Delphi of misleading investors would see their claim against the company fall from $204 million to $179 million.

Despite the changes, the plan could face objections. In court papers filed late Monday, the company said there are still disputes over the value of the company and the treatment of certain creditors.

Meanwhile, more amendments to the plan could be filed before a hearing Thursday in U.S. Bankruptcy Court to consider whether the plan should go before creditors for a vote.

Delphi, which filed for Chapter 11 more than two years ago, said it still intends to leave bankruptcy protection during the first three months of 2008.

Before the credit crunch, Delphi expected to leave Chapter 11 bankruptcy by the end of this year.

The company says it must leave bankruptcy by March 31, or it risks losing its $2.55-billion investment deal.

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