Delphi proposes amendments to reorganization plan

NEW YORK (Reuters) - Bankrupt auto parts maker Delphi Corp (DPHIQ.PK: Quote, Profile, Research, Stock Buzz) said on Wednesday it would file potential amendments to its reorganization plan that have been agreed to by former parent General Motors Corp (GM.N: Quote, Profile, Research, Stock Buzz) and an investor group lead by Appaloosa Management L.P.

Delphi Corp. which filed for bankruptcy in October 2005, said the amendment to the reorganization plan would reduce net funded debt to $5.2 billion from the $7.1 billion called for under the original.

The company said it planned to file the amendments in the U.S. Bankruptcy Court in Manhattan late on Wednesday.

"Today's filings, which have been agreed upon by GM and all of our plan investors, are the cornerstones of a plan of reorganization that we believe can be achieved during this challenging capital markets environment," John Sheehan, Delphi vice president and chief restructuring officer, said in a statement.

"We have agreed to very focused potential amendments to our reorganization plan which continues to provide for full recoveries for unsecured creditors at plan value as well as fair consideration for Delphi's equity holders."

Although GM and the plan investors support the potential changes, the Creditors' Committee and the Equity Committee do not, Troy, Michigan-based Delphi said.

"Delphi will continue to work toward a consensus among its principal stakeholders, including the Creditors' Committee and the Equity Committee, recognizing that such an outcome is not assured," the company said.

The company said it still is plans to emerge from Chapter 11 bankruptcy in n the first quarter 2008. Appaloosa and all of the other plan investors have delivered a fully executed bid letter to the company in connection with the revised agreement amendment, Delphi said.

Under the revised potential amendment the total enterprise value is reduced to $13.4 billion from the $13.9 billion called for under the original plan in September. The distributable equity value accounts for more of the enterprise value -- $8.1 billion versus $6.6 billion under the original plan.