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DETROIT — General Motors Corp. said Friday it will pay $2 billion to Delphi Corp. to aid in the sale of the automotive parts supplier to a private equity firm, in exchange for equity of a newly restructured Delphi.
According to a Friday Securities and Exchange Commission filing, General Motors, currently under bankruptcy protection, will use some of the $30 billion in taxpayer funds it is receiving to help a California firm, Parnassus Holdings II LLC, acquire the auto parts maker. Delphi is struggling to emerge from its own 2005 bankruptcy protection filing.
Troy, Mich.-based Delphi is a former GM subsidiary and the automaker's largest supplier. GM will also provide a $250 million credit facility to aid the company before it emerges from bankruptcy protection, and a $500 million loan facility following the sale.
"Delphi's modified plan represents an important step in resolving the Delphi bankruptcy and in GM's own efforts to reinvent its business," said GM spokeswoman Renee Rashid-Merem in a statement. "Relative to GM's support, the anticipated funding for the investment was contemplated in GM's revised viability plan, as well as the overall debtor-in-possession financing budget agreed to with the U.S. Treasury prior to GM's filing for Chapter 11."
A Treasury Department spokeswoman said in a statement Friday that it supports GM's efforts to help Delphi emerge from bankruptcy protection.
As previously announced, GM will also acquire some of Delphi's North American plants, as well as its steering business. Other "non-core" plants and assets will be sold off over time.
Parnassus Holdings II LLC, an affiliate of Platinum Equity, will operate Delphi's businesses both in the U.S. and abroad.
A spokesman for Platinum said the company has spent three years learning the business, developing restructuring plans and helping "create a roadmap to long-term health and profitability."
"Platinum is uniquely equipped to help Delphi emerge from bankruptcy," said Daniel Whelan.
