TROY, Mich. — General Motors has agreed to take a greater role in funding former auto- parts subsidiary Delphi ‘s exit from bankruptcy.
GM will assume as much as $2.83 billion in loans, up from $750 million, Delphi said in a regulatory filing Wednesday. Delphi’s struggle to find investors to complete a $6.1 billion loan package has delayed the biggest U.S. supplier’s emergence from 30 months of court protection.
Increased aid from GM may rile other Delphi investors. All but one member of a group that has agreed to take part in a $2.55 billion financing package oppose a greater GM role because of concern that it may curtail Delphi’s ability to sell parts to other automakers.
“GM must have become comfortable that these concessions would be enough to complete the exit financing,” said Kirk Ludtke, a senior analyst with CRT Capital Group LLC in Stamford, Conn.
The biggest change for Detroit-based GM is that its portion of about $3 billion in net recovery of money owed to the automaker will be slashed to about $175 million in cash from $2.25 billion after Delphi leaves bankruptcy.
GM had agreed to receive $2.25 billion in cash and assume a second-lien note of up to $750 million. The new agreement is for a first-lien note of as much as $2 billion, a second-lien note of as much as $825 million and $175 million in cash, according to the filing.
Delphi had planned to leave bankruptcy by the end of March. Spokesman Lindsey Williams said Wednesday the exit will be “as soon as practicable.”
