From Detroit Free Press

DETROIT -- Delphi Corp. announced a new financing plan that would invest up to $2.55 billion in the auto supplier to bring it out of bankruptcy protection.

Appaloosa Management L.P. is the plan's lead investor, with Harbinger Capital Partners Master Fund I Ltd; Merrill Lynch; Pierce, Fenner & Smith Inc.; UBS Securities LLC; Goldman Sachs & Co. and Pardus Capital Management L.P.

The financing deal announced Wednesday comes after a previous $3.4-billion plan fell through. In that plan, Cerberus Capital Management LP was the lead investor, along with Appaloosa, Harbinger and two other investment banks.

Delphi terminated that plan earlier this month after warning that it expected Cerberus, which is in the process of buying a majority stake in Chrysler, would not be part of the deal.

Delphi plans to file motions with bankruptcy court today to schedule hearings to approve the deal.

"Today's equity purchase and commitment agreement - and the support that it has received from our statutory committees and GM - represents additional progress in our transformation and provides further evidence to customers and other stakeholders that Delphi should receive the financial support necessary to emerge successfully from Chapter 11 reorganization," said John Sheehan, Delphi chief restructuring officer, in a statement.

(c) 2007, Detroit Free Press. Distributed by Mclatchy-Tribune News Service.