Corp. Chairman and CEO Robert S. “Steve” Miller will step down Jan. 1 as part of a tentative deal by the supplier to accept a cash injection of up to $3.4 billion from a group of private equity investors.
The investor group is led by Appaloosa Management LP, Cerberus Capital Management LP and Harbinger Capital Securities LLC, but also includes Merrill Lynch & Co. and UBS Securities LLC.
If approved by the U.S. Bankruptcy Court for the Southern District of New York, the deal would give the investors a significant stake in the company when it emerges from Chapter 11 protection in first-half 2007.
In connection with the arrangement, which outlines a new structure for’s board of directors, Miller will step down from his post but assume the role of executive chairman, continuing to oversee Delphi’s emergence from bankruptcy. A post-emergence executive chairman will be chosen at a later date.
Current President and Chief Operating Officer Rodney O’Neal will succeed Miller, Delphi says, taking on the combined role of president and CEO.
A hearing to approve the deal has been set for Jan. 5 in U.S. Bankruptcy Court.
The new transaction also hinges on Delphi reaching consensual labor agreements with its unions and former parentCorp. If an agreement cannot be reached by Jan. 31, the investors hold the right to terminate the deal, Delphi says.
“Although today’s court filings represent an encouraging and necessary move closer to emergence, we and our counterparts at the negotiating table must complete our work promptly and on a consensual basis if Delphi is to emerge from Chapter 11 during the first half of 2007,” says Delphi’s Miller.
In response to the deal, GM recognizes a number of matters still must be resolved at the bargaining table, but it remains committed to working with Delphi, its unions and other shareholders to reach a mutually agreed upon resolution for Delphi’s restructuring, the auto maker says in a statement.
Separately, Delphi accepts a proposal by J.P. Morgan Chase Bank N.A. and a group of lenders to refinance in-full the company’s existing $2 billion debtor-in-possession financing facility and approximately $2.5 billion pre-petition revolving and term-loan facilities.