Delphi seeks approval to continue to use bankruptcy loans
DETROIT, Nov 10 (Reuters) - Delphi Corp DPHIQ.PK is seeking court approval that will allow the bankrupt U.S. auto parts supplier to continue to use proceeds from its $4.35 billion bankruptcy financing through the first half of 2009, beyond the year-end maturity date.
In an effort to "preserve liquidity in the face of the unprecedented turbulence in the credit markets", Delphi has reached an agreement with lenders that represent the majority of its debtor-in-possession financing to keep using already drawn proceeds of the credit facility, the company said.
"The debtors believe that it is prudent to take steps at this time to preserve liquidity because they do not anticipate emerging from chapter 11 prior to the current maturity date," Delphi said in documents filed with the U.S. Bankruptcy Court in New York on Friday.
Delphi, which filed for bankruptcy protection in October 2005, had entered the final stages of emerging from court protection in April when potential equity investors led by Appaloosa Management pulled out, forcing Delphi to look for alternatives.
In September, Delphi won court approval for increased support from former parent General Motors Corp GM.N to support its eventual emergence from bankruptcy.
GM assumed about $6.8 billion of Delphi's retirement liabilities for hourly employees in the third quarter, which led to one-time gains totaling $5.7 billion and a quarterly net profit of $5.2 billion for Delphi, the supplier said. (Reporting by Soyoung Kim, editing by Leslie Gevirtz)
