DETROIT-- Delphi Corp. said today that it will receive $250 million from General Motors as part of Delphis new agreement to emerge from Chapter 11.
Delphi also said it agreed to sell to GM its global steering operations and four U.S. plants.
A unit of private equity firm Platinum Equity will acquire other U.S. and non-U.S. Delphi business operations, according to a Delphi statement. Those operations will get a financing package valued at $3.6 billion, Delphi said in the statement. A source familiar with the package says funds will come from various sources, including GM, but he declined to elaborate.
The new Delphi will be a formidable global supplier. Under ownership of Platinum Equity unit Parnassus Holdings II LLC., the company is expected to include as many as 100 manufacturing sites and100,000 employees worldwide, according to spokesman Lindsey Williams.
He said Delphi will continue to be operated by Delphi CEO Rodney ONeal and his management team.
The new company's specific ownership structure has not been disclosed.
As part of the reorganization, GM has agreed to buy Delphis global steering operations to avoid disruptions in production. The automaker would also acquire four of the parts makers plants. They include those in Kokomo, Ind.; Wyoming, Mich.; Lockport, N.Y.; and Rochester, N.Y.
Delphis announcement of a plan to emerge from Chapter 11 came as GM filed for bankruptcy protection in New York today.
In the statement, ONeal said: After an extended period of complex and challenging discussions with a wide range of stakeholders, we are confident that these modifications will provide a resolution that will allow Delphi to emerge from Chapter 11.
In the statement, GM said that it is committed to completing the Delphi transactions as an important step in resolving its own restructuring effort.
Delphi said a final approval hearing in U.S. Bankruptcy Court in New York is scheduled for July 23.
An effort in 2008 to reorganize Delphi with the help of GM and investors stumbled at the last minute after Appaloosa Capital Management backed out of a $2.55 billion plan to support its exit. Delphi sought creditor protection in October 2005.
Delphi was spun off from GM in 1999. GM has long been a financial backstop to Delphi because it is heavily dependent on the supplier for much of its components. GM has taken more than $11 billion in charges to help Delphis reorganization.
Delphi, based in suburban Detroit, makes a variety of powertrain, safety, steering, thermal, electrical, security and infotainment technologies. The company ranks No. 2 on the Automotive News list of the top 150 North American automakers with North American sales to automakers of $7.58 billion in 2008.
Reuters contributed to this report