From MEMA Industry News/Associated Press

DETROIT -- Delphi Corp. expects to cut about 650 finance jobs worldwide as part of its plan to reorganize operations and exit court protection, a company spokeswoman said on Monday, April 2.

Delphi filed court papers on Friday, March 30, asking for authority to enter into a contract with Genpact International LLC to perform financial functions, including accounts receivable, accounts payable, travel and expense reporting and other tasks.

Delphi expected to save about $150 million over the 88-months of the proposed agreement, after $78 million of one-time transition costs. The total cost for the contract is expected to be $180 million to $220 million.

A hearing on the request could be held later in April at the U.S. Bankruptcy Court for the Southern District of New York.

The job cuts fall under broad reductions in salaried workers contemplated in a business plan outlined a year ago, spokeswoman Claudia Piccinin said.

Delphi, which filed for bankruptcy in October 2005, said a year ago it expected to shed 21 of 29 U.S. union plants, four-fifths of its U.S. union workforce and thousands of salaried workers worldwide for the reorganization. It also plans to exit several businesses.

An investor group has proposed a $3.4 billion plan to support Delphi's emergence from court protection, contingent on the company reaching agreements with its unions and former parent General Motors.

Meanwhile, Owl Creek LP said on Monday it had signed on as an added investor for the proposed $3.4 billion investment plan to support Delphi's emergence from bankruptcy.

Owl Creek, which holds about 12.9 million shares of Delphi common stock comprising a 2.3 percent stake, agreed to buy up to 2.4 million shares from the investor group or through a proposed rights offering, it said in a filing with federal regulators.

The investor group led by Cerberus Capital Management LP and Appaloosa Management LP has agreed to invest up to $3.4 billion contingent on Delphi reaching agreements with its unions and GM.

The proposal includes $1.4 billion of common and preferred stock and an agreement to buy shares left over from a $2 billion rights offering to current stockholders, with the investor group receiving a controlling stake in a reorganized Delphi.

Appaloosa had said in March the investor group could sell more than 70 percent of its common stock stake to unidentified additional investors.

Goldman Sachs Group Inc. said in March it had signed on as an additional investor, agreeing to buy up to 642,857 shares from the investors and up to 5.79 million shares from the rights offering, if necessary.