CHICAGO -- Delphi Corp. on Wednesday said it has completed a $2.8 billion secured debt refinancing to give it access to enough cash for restructuring plans that include job cuts and plant closings.
Delphi said in May it planned to seek secured credit lifelines from lenders to refinance existing deals and give it enough liquidity to address high wage and other costs inherited in its spinoff from General Motors in 1999.
The Troy, Mich.,-based company said the refinancing, consisted of a $1.8 billion secured revolving credit facility and a $1 billion secured term loan, replacing a 364-day revolving credit line of $1.5 billion that was due to expire Friday.
The facilities replace a $3 billion revolving credit facility, which had no amounts outstanding, Delphi said. The secured revolving credit facility expires in June 2009 and the term loan comes due in full in 2011, it said.
JP Morgan and Citigroup were lead banks for the debt plan. The lenders have a first lien on substantially all material tangible and intangible assets of Delphi and its wholly-owned U.S. subsidiaries under the refinancing and Delphi has pledged 65 percent of the stock of its first-tier foreign units.
Delphi's wholly-owned domestic subsidiaries also will guarantee amounts borrowed, except for very small units and units participating in accounts receivable financings.
Delphi also said it contributed $475 million to its pension plans on Tuesday, for a total of $625 million in the quarter, and has now met minimum 2005 funding requirements.
Delphi plans later in June to file restated financial results stemming from an internal probe into accounting improprieties that forced out four executives, including former chief financial officer Alan Dawes, and two mid- to lower-level managers.
Delphi, of Troy, Mich., ranks No. 1 on the Automotive News list of top 150 original equipment suppliers to North America, with original equipment sales of $17.60 billion in 2004.