NEW YORK — Last night, the U.S. Bankruptcy Court for the Southern District of New York entered an order approving modifications to Delphi’s confirmed First Amended Joint Plan of Reorganization (as modified), related disclosures and voting procedures. The Court Order provides for the creation of a process through which other potential buyers may submit a binding offer for the company and also authorized and directed Delphi to solicit votes to accept or reject the Modified Plan in accordance with specified procedures.
Earlier this month, it was announced that Delphi had reached agreements to emerge from Chapter 11 through a transaction with Parnassus Holdings II, LLC, an affiliate of Platinum Equity, and with the support of GM Components Holdings LLC, an affiliate of General Motors Corp. Parnassus would operate Delphi’s U.S. and non-U.S. businesses going forward with emergence capital and capital commitments of approximately $3.6 billion, minus certain sites that will be acquired by GM Components Holding LLC. It was also reported that GM would provide Platinum Equity with more than $2.5 billion for its acquisition of Delphi, in addition to providing Delphi with up to $250 million to help fund operations through July 31.
However, the transaction agreements with GM and Platinum, as previously submitted to the Court, permit Delphi to consider unsolicited alternative transactions prior to the approval hearing for the Modified Plan and/or private sale on July 23.
During the June 10 hearing, the Court approved amendments to the GM Arrangement, which provides for $250 million of additional liquidity. The ruling provides Delphi with a fully financed runway to the July 23 approval hearing at which the Court can then consider the Modified Plan on its merits or, if necessary, the alternative private sale transactions. It will also provide an opportunity for any unsolicited feasible transactions to be considered appropriately by Delphi’s Board of Directors
Commenting on the news that Delphi may consider other options, Platinum Equity issued the following statement:
"Although we have an executed agreement in place, Platinum Equity fully supports maintaining what has always been an open and competitive process. As that process reaches culmination, we are confident that our offer will be validated as the highest and best before the court. Platinum Equity has spent nearly three years working with Delphi and its stakeholders, under the supervision of the court, to devise a solution that best ensures the long-term health of the business after its emergence from Chapter 11. We have never been the only prospective bidder in the process, nor even necessarily the favored bidder. But we have persevered with only one objective: Putting the strongest and most comprehensive solution on the table and delivering value for all of Delphi’s stakeholders.
"We have spent thousands of hours analyzing all aspects of Delphi’s business from a global, divisional, business unit and product-line perspective. We have studied, in detail, Delphi’s revenue and capital plans, its programs, commodity exposure, foreign currency exposure, manufacturing footprint, IT systems, allocation methodology, engineering resources and SG&A resources. We have held hundreds of meetings to discuss all aspects of Delphi’s business with management and employees at the headquarters and divisional level; with General Motors and other major OEM customers; and with the United Auto Workers union. Based on all of those meetings and a comprehensive analysis of what it will take to operate the business successfully, we have developed a comprehensive strategic operating plan for Delphi going forward."
