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Highland proposes $4.7 bln Delphi reorganization
2006-12-21
Highland Capital Management L.P. said on Thursday that it proposed a $4.7 billion reorganization plan to the board of Delphi Corp. (Other OTC:DPHIQ) just a few days after the company backed a different $3.4 billion plan. Highland, which is the second-largest shareholder in the company, said that its plan is better for more investors in Delphi, which is in bankruptcy protection. Delphi Corp. earlier this week laid out a road map for reorganization that includes an investment of up to $3.4 billion from a private equity group, potential creditor recoveries and an executive succession plan. Delphi declined to comment on the new offer. Appaloosa Management LP and Cerberus Capital Management LP are leading the group, giving the investors a large stake when Delphi emerges from bankruptcy. Delphi, which filed for bankruptcy in the United States in October 2005, has outlined plans to cut thousands of hourly and salaried workers, close or sell 21 of 29 U.S. union plants and drop several business lines to reorganize. The Appaloosa-Cerberus investor group also includes Harbinger Capital Partners Master Fund I Ltd., Merrill Lynch & Co. and UBS Securities LLC. The group, or Delphi, can terminate the agreement if Delphi does not reach deals with GM and the unions by January 31.
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