A bankruptcy court judge Thursday approved a $2 billion financing plan for the auto parts maker Delphi Corp. which filed for bankruptcy protection earlier this month. The plan allows the company to pay everyday expenses such as employee salaries.
The Troy, Mich.-based company’s so-called debtor-in-possession financing plan was arranged by a group of banks including Citigroup Inc. and JP Morgan Chase & Co.
Investment bank Rothschild Inc. served as advisor to Delphi when the parts maker sought out the backing from Wall Street lenders.
Of that $2 billion, $250 million is a term loan and $1.750 billion is a revolving credit facility.
Prior to approving Delphi’s $2 billion financing, Judge Robert Drain of U.S. Bankruptcy Court in New York, allowed the company to reject a license agreement for technology for electric connections in vehicles.
The judge also allowed the company to sell assets that are worth less than $10 million.
Delphi filed for Chapter 11 bankruptcy protection on Oct. 8 after failing to reach a restructuring agreement with the United Auto Workers and General Motors Corp., its former parent. The UAW refused to accept a cut in workers’ average wage rate from $27 an hour to the $10- to $12-an-hour range.
Delphi employs about 30,000 U.S. hourly workers.