UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) January 9, 2007
Delphi Corporation
(Exact Name of Registrant as Specified in Its Charter)
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| Delaware
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1-14787
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38-3430473 |
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| (State or Other Jurisdiction of
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(Commission File Number)
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(IRS Employer Identification No.) |
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| 5725 Delphi Drive, Troy, MI
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48098 |
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| (Address of Principal Executive Offices)
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(Zip Code) |
(248) 813-2000
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
TABLE OF CONTENTS
ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
On January 5, 2007, the United States (“U.S.”) Bankruptcy Court for the Southern District of New
York (“U.S. Bankruptcy Court”) granted Delphi Corporation’s (“Delphi”) motion to obtain replacement
post-petition financing of approximately $4.5 billion to refinance both its $2.0 billion Amended
and Restated Revolving Credit, Term Loan and Guaranty Agreement, dated as of November 21, 2006 (as
amended, the “Amended DIP Credit Facility”) and the approximate $2.5 billion outstanding on its
$2.825 billion Five Year Third Amended and Restated Credit Agreement, dated as of June 14, 2005 (as
amended, the “Prepetition Facility”). As previously reported in Delphi’s Current Report on Form
8-K filed December 18, 2006, Delphi sought court approval to enter into the replacement
post-petition financing and met with investors to discuss its plan. For more information regarding
the Amended DIP Credit Facility, and the related approvals granted by the U.S. Bankruptcy Court
under chapter 11 of the U.S. Bankruptcy Code, see Delphi’s previous Current Reports on Form 8-K
filed with the U.S. Securities and Exchange Commission (“SEC”) on November 22, 2005, February 8,
2006, April 18, 2006, June 20, 2006, August 11, 2006 and November 14, 2006. For more information
regarding Delphi’s Prepetition Facility, see Delphi’s 2005 Annual Report on Form 10-K and its
quarterly report on Form 10-Q for the six-month period ended June 30, 2006.
On January 9, 2007, Delphi entered into a Revolving Credit, Term Loan, and Guaranty Agreement (the
“Refinancing DIP Credit Facility”) to borrow up to approximately $4.5 billion from a syndicate of
lenders. The Refinancing DIP Credit Facility consists of a $1.75 billion first priority revolving
credit facility (“Tranche A” or the “Revolving Facility”), a $250 million first priority term loan
(“Tranche B” or the “Tranche B Term Loan” and, together with the Revolving Facility, the “First
Priority Facilities”), and an approximate $2.5 billion second priority term loan (“Tranche C” or
the “Tranche C Term Loan”).
The Refinancing DIP Credit Facility carries an interest rate at the option of Delphi of either the
Administrative Agent’s Alternate Base Rate plus (i), with respect to Tranche A borrowings, 1.50%,
(ii) with respect to Tranche B borrowings, 1.25% and (iii) with respect to Tranche C borrowings,
1.75%, or LIBOR plus (x), with respect to Tranche A borrowings, 2.50%, (y) with respect to Tranche
B borrowings, 2.25% and (z) with respect to Tranche C borrowings, 2.75%. The interest rate period
can be set at a one, three, or six-month period as selected by Delphi in accordance with the terms
of the Refinancing DIP Credit Facility. Accordingly, the interest rate will fluctuate based on the
movement of the Alternate Base Rate or LIBOR through the term of the Refinancing DIP Credit
Facility. The Refinancing DIP Credit Facility will expire on the earlier of December 31, 2007 and
the date of the substantial consummation of a reorganization plan that is confirmed pursuant to an
order of the U.S. Bankruptcy Court. Borrowings under the Refinancing DIP Credit Facility are
prepayable at Delphi’s option without premium or penalty.
The Refinancing DIP Credit Facility provides the lenders with a perfected first lien (with the
relative priority of each tranche as set forth above) on substantially all material tangible and
intangible assets of Delphi and its wholly-owned domestic subsidiaries (however, Delphi is only
pledging 65% of the stock of its first tier foreign subsidiaries to the extent that, in its
reasonable business judgment, adverse tax consequences would result) and further provides that
amounts borrowed under the Refinancing DIP Credit Facility will be guaranteed by substantially all
of Delphi’s affiliated Debtors, each as debtor and debtor-in-possession.
The amount outstanding at any one time under the First Priority Facilities is limited by a
borrowing base computation as described in the Refinancing DIP Credit Facility. Borrowing base
standards may be fixed and revised from time to time by the Administrative Agent in its reasonable
discretion, with any changes in such standards to be effective 10 days after delivery of a written
notice thereof to Delphi (or immediately, without prior written notice, during the continuance of
an event of default).
The Refinancing DIP Credit Facility includes affirmative, negative and financial covenants that
impose restrictions on Delphi’s financial and business operations, including Delphi’s ability to,
among other things, incur or secure other debt, make investments, sell assets and pay dividends or
repurchase stock. So long as the Facility Availability Amount (as defined in the Refinancing DIP
Credit Facility) is equal or greater than $500 million, compliance with the restrictions on
investments, mergers and disposition of assets do not apply (except in respect of investments in,
and dispositions to, direct or indirect domestic subsidiaries of Delphi that are not guarantors).
The covenants require Delphi to, among other things, maintain a rolling 12-month cumulative Global
EBITDAR for Delphi and its direct and indirect subsidiaries, on a consolidated basis, beginning on
December 31, 2006 and ending on November 30, 2007 at the levels set forth in the Refinancing DIP
Credit Facility.
The Refinancing DIP Credit Facility contains certain defaults and events of default customary for
debtor-in-possession financings of this type. Upon the occurrence and during the continuance of
any default in payment of principal, interest or
other amounts due under the Refinancing DIP Credit Facility, interest on all outstanding amounts is
payable on demand at 2% above the then applicable rate.
The foregoing description is qualified by the actual terms of the Refinancing DIP Credit Facility,
which is attached to this document as Exhibit 99(a).
ITEM 1.02 TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT
As described more fully in Item 1.01 above, Delphi has obtained replacement post-petition
financing of approximately $4.5 billion to refinance both its $2.0 billion Amended and Restated
Revolving Credit, Term Loan and Guaranty Agreement, dated as of November 21, 2006 (as amended, the
“Amended DIP Credit Facility”) and the approximate $2.5 billion outstanding on its $2.825 billion
Five Year Third Amended and Restated Credit Agreement, dated as of June 14, 2005 (as amended, the
“Prepetition Facility”). Concurrent with the entry into the Refinancing DIP Credit Facility
described in Item 1.01, the Amended DIP Credit Facility and the Prepetition Facility were
terminated. For more information regarding the material terms and conditions of the Amended DIP
Credit Facility, and the related approvals granted by the U.S. Bankruptcy Court under chapter 11 of
the U.S. Bankruptcy Code, see Delphi’s previous Current Reports on Form 8-K filed with the SEC on
November 22, 2005, February 8, 2006, April 18, 2006, June 20, 2006, August 11, 2006 and November
14, 2006. For more information regarding the material terms and conditions of Delphi’s Prepetition
Facility, see Delphi’s 2005 Annual Report on Form 10-K and its quarterly report on Form 10-Q for
the six-month period ended June 30, 2006. The proceeds of the Tranche B Term Loan and Tranche C
Term Loan were used to extinguish amounts outstanding under the Amended DIP Credit Facility and the
Prepetition Facility. Delphi incurred no early termination penalties in connection with the
termination of these agreements.
ITEM 2.03 CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET
ARRANGEMENT OF A REGISTRANT
As described more fully in Item 1.01 above, Delphi has obtained replacement post-petition
financing of approximately $4.5 billion to refinance both its $2.0 billion Amended and Restated
Revolving Credit, Term Loan and Guaranty Agreement, dated as of November 21, 2006 (as amended, the
“Amended DIP Credit Facility”) and the approximate $2.5 billion outstanding on its $2.825 billion
Five Year Third Amended and Restated Credit Agreement, dated as of June 14, 2005 (as amended, the
“Prepetition Facility”). On January 9, 2007, Delphi entered into a Revolving Credit, Term Loan,
and Guaranty Agreement (the “Refinancing DIP Credit Facility”) to borrow up to approximately $4.5
billion from a syndicate of lenders. The Refinancing DIP Credit Facility consists of a $1.75
billion first priority revolving credit facility (“Tranche A” or the “Revolving Facility”), a $250
million first priority term loan (“Tranche B” or the “Tranche B Term Loan” and, together with the
Revolving Facility, the “First Priority Facilities”), and an approximate $2.5 billion second
priority term loan (“Tranche C” or the “Tranche C Term Loan”). Although Delphi has not borrowed
any amounts under the Revolving Facility, it has received an aggregate of approximately $2.75
billion under the Tranche B Term Loan and Tranche C Term Loan. Such amounts were used to refinance
amounts outstanding under the concurrently terminated Amended DIP Credit Facility and Prepetition
Facility, see Item 1.02 above. For more information on the terms of the Tranche B Term Loan and
Tranche C Term Loan, see Item 1.01 above and the related exhibits.
ITEM 8.01 OTHER EVENTS
On
January 11, 2007, Delphi contributed approximately $50 million to its U.S. pension plans. These
defined benefit pension plans are sponsored by Delphi and certain of its U.S. subsidiaries, all of
whom (collectively, the “Debtors”) filed for court-supervised restructuring under chapter 11 of the
U.S. Bankruptcy Code (“Chapter 11”). The amount contributed represents the portion of the pension
contribution attributable to services rendered by employees of the Debtors in the fourth quarter of
2006. Under the Employee Retirement Income Security Act and the U.S. Internal Revenue Code, a
minimum funding payment of approximately $395 million to the U.S. pension plans was due on January
12, 2007. As permitted under Chapter 11, however, Delphi contributed only the portion of the
contribution attributable to post-bankruptcy-petition service. The unpaid portion of the minimum
funding payments remains payable as a claim against Delphi and will be determined in Delphi’s plan
of reorganization with other claims. Delphi has appointed an independent fiduciary for all of its
tax qualified defined benefit pension plans who is charged with pursuing claims on behalf of the
plans to recover minimum funding contributions.