Court gives Delphi extensions on GM, pension deals

DETROIT (Reuters) - A U.S. Bankruptcy Court judge on Monday gave auto parts maker Delphi Corp DPHIQ.PK more room to complete its reorganization by allowing it to extend looming deadlines on agreements with General Motors Corp (GM.N: Quote, Profile, Research) and the Internal Revenue Service.

Delphi, which filed for bankruptcy in October 2005, has been struggling to wrap up exit financing for a reorganization plan confirmed by the bankruptcy court in New York in January because of tight U.S. credit markets.

Troy, Michigan-based Delphi had sought to emerge from court protection by the end of the first quarter, but said recently it would emerge as soon as practicable and has been requesting extensions for deadlines on various agreements.

Judge Robert Drain allowed Delphi to extend until April 15 an agreement that allows it to transfer billions of dollars of union pension liabilities to former parent GM. The agreement was to expire on Monday.

Drain also granted Delphi an extension on pension funding waivers with the Internal Revenue Service through April 7 that was to expire Monday. Delphi was also allowed to extend letters of credit provided to the Pension Benefit Guaranty Corp until April 22 and increase their size by $2.5 million.

Delphi has made nominal contributions to the pensions during the reorganization and said in court papers it could face penalties of more than $1.4 billion without extensions.

Delphi has sought $6.1 billion of exit financing, including up to $2.825 billion of loans from GM. An investor group led by Appaloosa Management LP has backed a $2.55 billion equity plan to support the reorganization as well.

(Reporting by David Bailey; Editing by Lincoln Feast)