Delphi Corporation 8-K 2009
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) September 29, 2009
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TABLE OF CONTENTS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
Amendment to GM Advance Agreement
On September 29, 2009, Delphi Corporation (Delphi or the Company) entered into a further amendment (the Fifteenth Amendment) to its existing liquidity agreement (the GM Advance Agreement) between Delphi and General Motors Company (as assignee of Motors Liquidation Company, formerly known as General Motors Corporation) ( GM). As set forth more fully below, the effect of the Fifteenth Amendment was to extend the deadline for Delphi to satisfy certain milestones, which if not met, would prevent Delphi from continued access to the facility.
As previously reported, the GM Advance Agreement was amended and restated on June 1, 2009 to provide Delphi with an additional $250 million credit facility (the Tranche C Facility), subject to Delphis continued satisfaction of certain conditions and milestones. For a complete description of the terms of the GM Advance Agreement as so amended and restated prior to the First and Second Amendments, see Delphis Current Reports on Form 8-K filed June 18, 2009, July 30, 2009, August 3, 5, 7, 10, 17, 19, 24, and 28, 2009, September 4, and 21, 2009 and Delphis Annual Report on Form 10-K for the year ended December 31, 2008 and Delphis Quarterly Report on Form 10-Q for the quarter ended June 30, 2009. The following description of the terms of the Fifteenth Amendment is qualified by reference to the full text of the amendment, a copy of which is filed as Exhibit 99(a) to this report and incorporated by reference herein.
Delphis continued ability to request advances under the Tranche C Facility is conditioned on progress in achieving the transactions contemplated by the confirmed First Amended Joint Plan Reorganization as modified (as further modified, amended and supplemented, the Modified Plan), as filed with the United States (U.S.) Bankruptcy Court for the Southern District of New York (the Court) on June 16, 2009. Specifically, prior to the Fifteenth Amendment, the ability of Delphi to request advances on or after September 29, 2009 was conditioned on the entry by the Court of an order, in form and substance reasonably acceptable to GM, approving the Modified Plan or an implementation agreement pursuant to which the parties to the Master Disposition Agreement, dated June 1, 2009, as revised and amended, among Delphi, GM Components Holdings, LLC, GM and Parnassus Holdings II, LLC, would perform their obligations thereunder pursuant to Section 363 of the Bankruptcy Code, independent of and not pursuant to or contingent on the effectiveness of the Modified Plan. The Fifteenth Amendment extends the September 29, 2009 date until 8:00 p.m. (Eastern time) on October 7, 2009. All other terms of the GM Advance Agreement remain in effect.
Amendment to Accommodation Agreement
On September 29, 2009, Delphi entered into a further amendment (the Thirty-Fourth Amendment), to its accommodation agreement (as previously amended and supplemented through the date hereof, the Accommodation Agreement), with its lenders under its existing debtor-in-possession financing agreement (the Amended and Restated DIP Credit Facility) (consisting of a $1.1 billion first priority revolving credit facility (the Tranche A Facility), a $500 million first priority term loan (the Tranche B Term Loan) and a $2.75 billion second priority term loan (the Tranche C Term Loan)), with the lenders under the Amended and Restated DIP Credit Facility (the DIP Lenders). The effect of the Thirty-Fourth Amendment is to extend the term of the Accommodation Agreement to 8:00 p.m. (Eastern time) on October 7, 2009. The following description of the Thirty-Fourth Amendment is qualified in its entirety by the text of such amendment, a copy of which is filed as Exhibit 99(b) to this report and incorporated by reference herein. A description of the material terms of the Accommodation Agreement prior to such modifications is set forth in Delphis Current Reports on Form 8-K filed with the United States Securities and Exchange Commission on March 31, 2009, as amended on April 1, 2009 solely for the purposes of adding an exhibit, April 3, 2009, as amended on April 7, 2009 solely for the purposes of adding another exhibit, April 23, 2009, May 8, 2009, June 2, 9, 18, 22, and 24, 2009, July 1, 8, 13, 20, 22, and 30, 2009, August 3, 5, 7, 10, 17, 19, 24, and 28, 2009, September 4, and 21, 2009 (the Original Forms 8-K), which descriptions are incorporated herein by reference.
Pursuant to the Accommodation Agreement, as in effect prior to the Thirty-Fourth Amendment (the Prior Accommodation Agreement), the lenders agreed, among other things, to allow Delphi to continue using the proceeds of the Amended and Restated DIP Credit Facility and to forbear from the exercise of certain default-related remedies, in each case until September 29, 2009, subject to the continued satisfaction by Delphi of a number of covenants and conditions. The Thirty-Fourth Amendment further extends that date until 8:00 p.m. (Eastern time) on October 7, 2009. There currently remains approximately $230 million outstanding under the Tranche A Facility, $310 million outstanding under the Tranche B Term Loan and $2.75 billion outstanding under the Tranche C Term Loan under the Amended and Restated DIP Credit Facility. The Thirty-Fourth Amendment also provides that the requisite majority of DIP Lenders have 105 business days (modified from 95 business days) to notify Delphi that the modified plan of reorganization filed on June 1, 2009 is not satisfactory.
The remaining provisions in the Accommodation Agreement are materially unchanged. For information regarding the current terms of the Accommodation Agreement, as modified, which is not otherwise set forth in this Current Report on Form 8-K, including the covenants and conditions of the lenders continued forbearance from exercising remedies through
the accommodation period and including the ability to access certain cash collateral accounts, see Delphis Annual Report on Form 10-K for the year ended December 31, 2008 (the Annual Report), including the exhibits to the Annual Report, Delphis Quarterly Report on Form 10-Q for the quarter ended June 30, 2009 and the Original Forms 8-K.
Although Delphi is currently in compliance with the terms of the Accommodation Agreement (after giving effect to the Thirty-Fourth Amendment), Delphis continued compliance and access to sufficient liquidity to fund its working capital requirements and operations is dependent on a number of factors including Delphi remaining in compliance with the provisions of the GM Advance Agreement and administrative creditors, including its suppliers, continuing to provide services and goods on customary payment terms.
Amendment to Partial Temporary Accelerated Payment Agreement
On October 1, 2009, Delphi entered into a further amendment (the Fifth Amendment) to its existing liquidity agreement (the Partial Temporary Accelerated Payment Agreement) between Delphi and GM, whereby GM agreed to accelerate payment of certain payables up to $300 million to Delphi. The following description of the Fifth Amendment is qualified in its entirety by the text of such amendment, a copy of which is filed as Exhibit 99(c) to this report and incorporated by reference herein. The Partial Temporary Accelerated Payments Agreement provided that GM would generally recoup these accelerated payments on or after the date that GMs obligation to advance funds under the GM Advance Agreement terminates or advances made become due and payable in accordance with the GM Advance Agreement. The effect of the Fifth Amendment was to extend the date by which GM will offset the balance of the accelerated payments to its November 2009 MNS-2 payment (or subsequent MNS-2 payments) to Delphi, with the effect of increasing the GM payables to Delphi by the amount so offset.
This Current Report on Form 8-K, including the exhibits being filed as part of this report, as well as other statements made by Delphi may contain forward-looking statements that reflect, when made, the Companys current views with respect to current events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Companys operations and business environment which may cause the actual results of the Company to be materially different from any future results, express or implied, by such forward-looking statements. In some cases, you can identify these statements by forward-looking words such as may, might, will, should, expects, plans, anticipates, believes, estimates, predicts, potential or continue, the negative of these terms and other comparable terminology. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of the liquidity support agreements with GM, its debtor-in-possession financing facility and the related accommodation agreement, and to obtain an extension of term or other amendments as necessary to maintain access to such liquidity support agreements and facility; the Companys ability to obtain Court approval with respect to motions in the Chapter 11 cases prosecuted by it from time to time, and to consummate the Modified Plan or any subsequently filed plan of reorganization and to consummate such plan or other consensual resolution of Delphis Chapter 11 cases; risks associated with third parties seeking and obtaining Court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases; the ability of the Company to obtain and maintain normal terms with vendors and service providers; the Companys ability to maintain contracts that are critical to its operations; the potential adverse impact of the Chapter 11 cases on the Companys liquidity or results of operations; the ability of the Company to fund and execute its business plan as described in the Modified Plan as filed with the Court and to do so in a timely manner; the ability of the Company to attract, motivate and/or retain key executives and associates; the ability of the Company to avoid or continue to operate during a strike, or partial work stoppage or slow down by any of its unionized employees or those of its principal customers and the ability of the Company to attract and retain customers. Additional factors that could affect future results are identified in the Annual Report, including the risk factors in Part I. Item 1A. Risk Factors contained therein and in Part II. Item 1A. Risk Factors in the Quarterly Reports on Form 10-Q for the quarters ended March 31, 2009 and June 30, 2009. Delphi disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise. Similarly, these and other factors, including the terms of any reorganization plan ultimately confirmed, can affect the value of the Companys various prepetition liabilities, common stock and/or other equity securities. Under the Modified Plan confirmed by the Court on July 30, 2009, holders of Delphis common stock will receive no value.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits. The following exhibits are being filed as part of this report.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.