===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 2)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULES 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
DELPHI CORPORATION
-------------------------------------------------------------------------------
(Name of Issuer)
Common Stock, par value $0.01 per share
-------------------------------------------------------------------------------
(Title of Class of Securities)
247126105
-------------------------------------------------------------------------------
(CUSIP Number)
Merrill Lynch & Co., Inc.
4 World Financial Center
250 Vesey Street
New York, New York 10080
Telephone: (212) 449 - 1000
-------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
February 28, 2007
-------------------------------------------------------------------------------
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1 (e), 13d-1(f) or 13d-1 (g), check the
following box. This box should not be checked off.
(Continued on following pages)
(Page 1 of 16 Pages)
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
NOTES).
===============================================================================
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 2 of 16
--------------------- -----------------
--------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Merrill Lynch & Co., Inc.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 0 Shares
------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED 1,475,701 Shares
------------------------------------------------
BY EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 0 Shares
------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
1,475,701 Shares
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,475,701 Shares(1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.27 %(1)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
HC, CO
--------------------------------------------------------------------------------
-------------
(1) As a result of the proposal and related agreements described in Item 4,
the Reporting Persons may be deemed to be the beneficial owners of Shares
beneficially owned by the other persons described in Item 4. Based on
information provided in its Schedule 13D/A, filed on March 12, 2007,
Appaloosa Management L.P. and its related entities beneficially own
52,000,000 Shares (9.26% of the outstanding Shares); based on information
provided in its Schedule D filed on December 22, 2006, Harbinger Capital
Partners Master Fund I, Ltd. and its related entities beneficially own
26,450,000 Shares (4.71% of the outstanding Shares), and based on
information provided in its Schedule 13D, filed on January 8, 2007, UBS
Securities LLC and its related entities beneficially own 4,422,207 Shares
(0.79%). The total percentage of the outstanding Shares beneficially
owned by the group is 15.02%.
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 3 of 16
--------------------- -----------------
--------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Merrill Lynch, Pierce, Fenner & Smith Incorporated
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 1,468,386 Shares
------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED 0 Shares
------------------------------------------------
BY EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 1,468,386 Shares
------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0 Shares
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,468,386 Shares(1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.26 %(1)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
BD, IA, CO
--------------------------------------------------------------------------------
------------
(1) As a result of the proposal and related agreements described in Item 4,
the Reporting Persons may be deemed to be the beneficial owners of Shares
beneficially owned by the other persons described in Item 4. Based on
information provided in its Schedule 13D/A, filed on March 12, 2007,
Appaloosa Management L.P. and its related entities beneficially own
52,000,000 Shares (9.26% of the outstanding Shares); based on information
provided in its Schedule D filed on December 22, 2006, Harbinger Capital
Partners Master Fund I, Ltd. and its related entities beneficially own
26,450,000 Shares (4.71% of the outstanding Shares), and based on
information provided in its Schedule 13D, filed on January 8, 2007, UBS
Securities LLC and its related entities beneficially own 4,422,207 Shares
(0.79%). The total percentage of the outstanding Shares beneficially
owned by the group is 15.02%.
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 4 of 16
--------------------- -----------------
--------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Merrill Lynch Financial Markets, Inc.
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 515 Shares
------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED 0 Shares
------------------------------------------------
BY EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 515 Shares
------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0 Shares
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
515 Shares
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.00 %(1)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
CO
--------------------------------------------------------------------------------
------------
(1) As a result of the proposal and related agreements described in Item 4,
the Reporting Persons may be deemed to be the beneficial owners of Shares
beneficially owned by the other persons described in Item 4. Based on
information provided in its Schedule 13D/A, filed on March 12, 2007,
Appaloosa Management L.P. and its related entities beneficially own
52,000,000 Shares (9.26% of the outstanding Shares); based on information
provided in its Schedule D filed on December 22, 2006, Harbinger Capital
Partners Master Fund I, Ltd. and its related entities beneficially own
26,450,000 Shares (4.71% of the outstanding Shares), and based on
information provided in its Schedule 13D, filed on January 8, 2007, UBS
Securities LLC and its related entities beneficially own 4,422,207 Shares
(0.79%). The total percentage of the outstanding Shares beneficially
owned by the group is 15.02%.
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 5 of 16
--------------------- -----------------
--------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Merrill Lynch Bank & Trust Co., FSB
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Federal Savings Bank under US Federal law
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 6,635 Shares
------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED 0 Shares
------------------------------------------------
BY EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 6,635 Shares
------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0 Shares
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,635 Shares(1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.00 %(1)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
BK
--------------------------------------------------------------------------------
------------
(1) As a result of the proposal and related agreements described in Item 4,
the Reporting Persons may be deemed to be the beneficial owners of Shares
beneficially owned by the other persons described in Item 4. Based on
information provided in its Schedule 13D/A, filed on March 12, 2007,
Appaloosa Management L.P. and its related entities beneficially own
52,000,000 Shares (9.26% of the outstanding Shares); based on information
provided in its Schedule D filed on December 22, 2006, Harbinger Capital
Partners Master Fund I, Ltd. and its related entities beneficially own
26,450,000 Shares (4.71% of the outstanding Shares), and based on
information provided in its Schedule 13D, filed on January 8, 2007, UBS
Securities LLC and its related entities beneficially own 4,422,207 Shares
(0.79%). The total percentage of the outstanding Shares beneficially
owned by the group is 15.02%.
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 6 of 16
--------------------- -----------------
--------------------------------------------------------------------------------
NAME OF REPORTING PERSON
1 I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Merrill Lynch International
--------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X]
(b) [_]
--------------------------------------------------------------------------------
3 SEC USE ONLY
--------------------------------------------------------------------------------
4 SOURCE OF FUNDS
OO
--------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
[_]
--------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
England and Wales
--------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF 165 Shares
------------------------------------------------
SHARES 8 SHARED VOTING POWER
BENEFICIALLY OWNED 0 Shares
------------------------------------------------
BY EACH REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 165 Shares
------------------------------------------------
WITH 10 SHARED DISPOSITIVE POWER
0 Shares
--------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
165 Shares(1)
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
[_]
--------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.00 %(1)
--------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
OO
--------------------------------------------------------------------------------
------------
(1) As a result of the proposal and related agreements described in Item 4,
the Reporting Persons may be deemed to be the beneficial owners of Shares
beneficially owned by the other persons described in Item 4. Based on
information provided in its Schedule 13D/A, filed on March 12, 2007,
Appaloosa Management L.P. and its related entities beneficially own
52,000,000 Shares (9.26% of the outstanding Shares); based on information
provided in its Schedule D filed on December 22, 2006, Harbinger Capital
Partners Master Fund I, Ltd. and its related entities beneficially own
26,450,000 Shares (4.71% of the outstanding Shares), and based on
information provided in its Schedule 13D, filed on January 8, 2007, UBS
Securities LLC and its related entities beneficially own 4,422,207 Shares
(0.79%). The total percentage of the outstanding Shares beneficially
owned by the group is 15.02%.
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 7 of 16
--------------------- -----------------
This Amendment No. 2 (the "Amendment") to the statement on Schedule 13D
initially filed on December 28, 2006 (the "Initial Schedule 13D"), as amended
by Amendment No. 1 thereto filed on January 30, 2007 (as amended by Amendment
No.1, the "Amended Schedule 13D") by Merrill Lynch & Co., Inc. ("ML&Co."),
Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S"), Merrill Lynch
Financial Markets, Inc. ("MLFM"), Merrill Lynch Bank & Trust Co., FSB
("MLTFSB") and Merrill Lynch International ("MLI") (collectively, the
"Reporting Persons"), relates to shares of Common Stock, par value $0.01 per
share (the "Shares") of Delphi Corporation (the "Issuer"), and is being filed
to amend the Amended Schedule 13D as specifically set forth below.
Certain information contained in this Schedule 13D/A relates to share ownership
of persons other than the Reporting Persons. The Reporting Persons expressly
disclaim any liability for any such information and for any other information
provided in this Amendment that does not expressly pertain to a Reporting
Person, as such term is defined in Item 2 of the Initial Schedule 13D. The
information set forth in the Exhibits to this Amendment is hereby expressly
incorporated herein by reference, and the responses to each item of this
Amendment are qualified in their entirety by the provisions of such Exhibits.
Unless otherwise indicated, all capitalized terms shall have the meanings
ascribed to them in the Initial Schedule 13D, and unless otherwise amended
hereby, all information previously filed remains in effect.
ITEM 4. PURPOSE OF TRANSACTIONS.
Item 4 is amended and restated as follows:
The acquisition of the shares of Common Stock that are currently beneficially
owned by the Reporting Persons was for investment purposes or in other ordinary
course activities. As described below, MLPF&S has acted as a financial advisor
and investor in connection with a proposal for an investment in the Issuer.
On July 31, 2006, Appaloosa Management L.P. ("Appaloosa") and the Issuer
entered into a Confidential Information, Standstill and Nondisclosure Agreement
(the "Confidentiality Agreement"). The Confidentiality Agreement is attached as
Exhibit 3 to the Schedule 13D/A filed by Appaloosa on August 1, 2006. Pursuant
to the terms of the Confidentiality Agreement, the Issuer may furnish to
Appaloosa certain non-public, confidential and/or proprietary information
pertaining to the Issuer which is reasonably necessary in order for Appaloosa
to evaluate a possible negotiated business arrangement involving the Issuer in
its reorganization case under chapter 11 of the Bankruptcy Code. Subject to
customary exceptions, Appaloosa agreed to keep the Evaluation Material (as
defined in the Confidentiality Agreement) strictly confidential. Prior to the
Release Date (as defined in the Confidentiality Agreement), unless otherwise
agreed to by the Issuer in writing, Appaloosa agreed to engage in discussions
and negotiate exclusively with the Issuer and its legal and financial advisors
with respect to a possible negotiated business arrangement involving the
Issuer. In addition, in accordance with the Confidentiality Agreement,
Appaloosa withdrew a letter it had written to the Issuer's board of directors
on March 15, 2006 regarding the Issuer's chapter 11 reorganization (the
"Bankruptcy Proceedings") and agreed not to take certain other actions, as more
fully described in the Confidentiality Agreement.
On August 25, 2006, Appaloosa and the Issuer entered into an amendment to the
Confidentiality Agreement (the "Amendment"). The Amendment is attached as
Exhibit 6 to the Schedule 13D/A filed by Appaloosa on August 29, 2006. Pursuant
to the Amendment, in connection with certain confidential information produced
and designated as "confidential" or "highly confidential" by the Debtors (as
defined in the Amendment) under various stipulations and protective orders
entered into in the Issuer's reorganization case under chapter 11 of the
Bankruptcy Code, that has been furnished and may continue to be furnished to
certain representatives of Appaloosa (the "Litigation Material"), Appaloosa may
use the Litigation Material for a Permitted Purpose (as defined in the
Amendment), and the Litigation Material so used will be deemed Evaluation
Material (as defined in the Confidentiality Agreement).
On July 31, 2006, Appaloosa engaged UBS Securities LLC ("UBS") as lead
financial adviser and lead capital markets provider and engaged MLPF&S as an
additional financial adviser, in each case in connection with any potential
restructuring, acquisition or other transaction involving the Issuer. Pursuant
to the engagement letters, UBS and ML&Co. have been given an opportunity to
participate in any debt or equity financing transaction involving the Issuer
that is sponsored by Appaloosa and not financed by Appaloosa. The engagement
letters are attached as Exhibits 4 and 5, respectively, to the Schedule 13D/A
filed by Appaloosa on August 1, 2006.
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 8 of 16
--------------------- -----------------
PROPOSAL LETTER
On December 18, 2006, A-D Acquisition Holdings, LLC ("ADAH") (an affiliate of
Appaloosa), Dolce Investments, LLC ("Dolce") (an affiliate of Cerberus Capital
Management L.P. ("Cerberus")), Harbinger Del-Auto Investment Company, Ltd.
("Del-Auto") (an affiliate of Harbinger Capital Partners Master Fund I, Ltd.
("Harbinger")), MLPF&S and UBS delivered to the Issuer a proposal, which the
Issuer accepted, for a potential investment of up to $3.4 billion in the
aggregate in preferred and common equity of the reorganized Issuer and a
proposed reorganization framework for the Issuer (the "Proposal"). Each of
ADAH, Dolce, Del-Auto, MLPF&S and UBS are referred to herein as the
"Investors." A copy of the Proposal is attached as Exhibit 99.E to the Form 8-K
filed by Delphi Corporation on December 18, 2006.
According to the Proposal, the Investors would enter into an Equity Purchase
and Commitment Agreement (the "Investment Agreement") providing for the
potential equity investment. The Proposal will terminate if, on or before
January 22, 2007, (x) the United States Bankruptcy Court for the Southern
District of New York (the "Bankruptcy Court") does not issue an order
reasonably satisfactory to the Investors approving and authorizing the Issuer
to enter into the Investment Agreement and certain other matters, (y) the
Issuer has not entered into the Investment Agreement or (z) any of the
Investors determines in its sole discretion that any of the conditions
contained in the Investment Agreement are incapable of being satisfied or that
any of the Investors is entitled to exercise a termination right under the
Investment Agreement.
EQUITY INVESTMENT
Under the terms of the Investment Agreement, on the terms and subject to the
conditions of the Investment Agreement, the Investors would purchase an
aggregate of $1.2 billion of convertible preferred stock and approximately $200
million of common stock in the reorganized Issuer as follows: (i) each Investor
would purchase (A) for $35.00 per share, each Investor's proportionate share of
6,300,000 shares of the reorganized Issuer's new common stock (the "Direct
Subscription Shares") and (B) for $35.00 per share, each Investor's
proportionate share of the reorganized Issuer's new Series B Senior Convertible
Preferred Stock (the "Series B Preferred Stock"); (ii) Dolce would purchase for
$35.00 per share, 8,571,429 shares of the reorganized Issuer's new Series A-1
Senior Convertible Preferred Stock (the "Series A-1 Preferred Stock"); and
(iii) ADAH would purchase for $35.00 per share, 8,571,429 shares of the
reorganized Issuer's new Series A-2 Senior Convertible Preferred Stock (the
"Series A-2 Preferred Stock", and together with the Series A-1 Preferred Stock,
the "Series A Preferred Stock"). The number of Direct Subscription Shares and
Series B Preferred Stock to be purchased by each Investor is set forth on
Schedule 2 to the Investment Agreement.
Additionally, on the terms and subject to the conditions of the Investment
Agreement, the Investors would purchase any unsubscribed shares of the
reorganized Issuer's new common stock (the "Backstop Shares") in connection
with an approximately $2.0 billion rights offering that would be made available
to holders of Common Stock as of a record date to be determined by the Issuer.
In accordance with the Investment Agreement, the Issuer would distribute
certain rights to holders of Common Stock to acquire new common stock of the
reorganized Issuer subject to the effectiveness of a registration statement to
be filed with the Commission, approval of the Bankruptcy Court and satisfaction
of other terms and conditions. The rights, which would be transferable by the
original eligible holders, would permit holders to purchase their pro rata
share of new common stock of the reorganized Issuer at $35.00 per share.
Altogether, the Investors could invest up to an aggregate of $3.4 billion in
the reorganized Issuer. The Investment Agreement is subject to the completion
of due diligence to the satisfaction of the Investors in their sole discretion,
satisfaction or waiver of numerous other conditions (including the Issuer's
achievement of consensual agreements with its U.S. labor unions and General
Motors Corporation ("GM") that are acceptable to the Investors in their sole
discretion) and the non-exercise by either the Issuer or the Investors of
certain termination rights, all of which are more fully described in the
Investment Agreement.
The Investors would be entitled to payment of certain commitment fees and an
alternate transaction fee at the times and under the circumstances set forth in
the Investment Agreement.
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 9 of 16
--------------------- -----------------
PLAN OF REORGANIZATION FRAMEWORK
The Investors, the Issuer and GM also executed on December 18, 2006, a Plan
Framework Support Agreement (the "Plan Framework Support Agreement") which
contains terms pursuant to which the parties agree to support confirmation and
consummation of a plan of reorganization for the Issuer which will be based on
the terms contained in the Plan Framework Support Agreement (the "Plan
Framework"). A copy of the Plan Framework Support Agreement is attached as
Exhibit 99.A to the Form 8-K filed by Delphi Corporation on December 18, 2006.
The Plan Framework provides for, among other things, the distributions to be
made to creditors and stockholders, the treatment of GM's claims against the
Issuer, the resolution of certain pension funding issues and the corporate
governance of the reorganized Issuer. The Plan Framework Support Agreement as
well as the economics and structure of the Plan Framework itself are
conditioned on reaching consensual agreements with the Issuer's U.S. labor
unions and GM. Both the Issuer and the Investors are permitted to terminate the
Investment Agreement (which terminates the Plan Framework Support Agreement) if
consensual agreements are not reached with the Issuer's U.S. labor unions and
GM by January 31, 2007.
CORPORATE GOVERNANCE STRUCTURE
The Investment Agreement and the Plan Framework Support Agreement also include
certain corporate governance provisions for the reorganized Issuer. Under the
terms of the proposed plan, the reorganized Issuer would be governed by a 12
member board of directors, two of whom would be a new Executive Chairman and a
new Chief Executive Officer and President. Pursuant to the term sheet for
preferred stock attached as an Exhibit to the Investment Agreement (the
"Preferred Term Sheet") and Plan Framework Support Agreement, Rodney O'Neal
would be the Chief Executive Officer and President of the Issuer.
A five member selection committee, consisting of John D. Opie, the lead
independent director of the Issuer's current board of directors, a
representative of each of the Issuer's two statutory committees and a
representative of each of Appaloosa and Cerberus will select the company's
post-emergence Executive Chairman as well as four other directors (one of whom
may be from the Issuer's current board of directors). Appaloosa and Cerberus
must both concur in the selection of the Executive Chairman, but do not vote on
the four other directors. Each of Appaloosa and Cerberus would appoint three
board members comprising the remaining six members of the reorganized Issuer's
new board of directors. The Reporting Persons do not have any right to appoint
any members of the new board of directors. The new board of directors would be
required to satisfy all independence requirements imposed by the relevant stock
exchange on which the reorganized Issuer's common stock would be traded.
Executive compensation for the reorganized Issuer must be on market terms, must
be reasonably acceptable to ADAH and Dolce, and the overall executive
compensation plan design must be described in the Issuer's disclosure statement
and incorporated into the plan of reorganization. The holders of the Series A
Preferred Stock will have certain approval rights with respect to certain
significant corporate transactions such as incurring debt, transferring assets
and engaging in mergers or acquisitions, as more fully described in the
Preferred Term Sheet. The Reporting Persons will not beneficially own any
shares of Series A Preferred Stock.
Subsequent to December 18, 2006 and in connection with the Bankruptcy
Proceedings, the Investors and the Issuer agreed to certain modifications to
the Investment Agreement, including, but not limited to, modifications to the
termination rights of the Issuer and the Investor under the Investment
Agreement and the circumstances that would constitute a "change of
recommendation" by the Issuer. A copy of the modified Investment Agreement has
been filed as Exhibit 13 to the Schedule 13D/A filed by Appaloosa on January
18, 2007. Furthermore, subsequent to December 18, 2006 and in connection with
the Bankruptcy Proceedings, the parties to the Investment Agreement agreed to
enter into a Supplement to the Investment Agreement (the "IA Supplement")
pursuant to which for so long as the official committee of unsecured creditors
of the Issuer in the Bankruptcy Proceedings (the "Creditors' Committee")
supports the implementation of the Investment Agreement and the Plan Framework
Support Agreement and the transactions contemplated thereby, the parties to the
Investment Agreement would agree to certain amendments to the Investment
Agreement. In addition, the parties to the Plan Framework Support Agreement
agreed to an Amendment and Supplement to the Plan Framework Support Agreement
(the "PFSA Amendment and Supplement" and, the PFSA Amendment and Supplement
together with the IA Supplement, the "Supplements") pursuant to which (i) the
parties to the Plan Framework Support Agreement agreed to certain amendments to
the Plan Framework Support Agreement and (ii) for so long as the Creditors'
Committee supports the implementation of the Investment Agreement and the Plan
Framework Support Agreement and the transactions contemplated thereby, the
parties to the Plan Framework Support Agreement would agree to certain
additional modifications to the Plan Framework Support Agreement.
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 10 of 16
--------------------- -----------------
The IA Supplement involves, among other things, (i) specified procedures for
ADAH and Dolce to propose an alternative exit financing and a related
termination right for the Issuer and (ii) modification of the Preferred Term
Sheet to clarify that on a change of control of the Issuer, the fair market
value of the Series B Preferred Stock shall not reflect the value of the
governance rights attributable to the Series A Preferred Stock. The PFSA
Amendment and Supplement involves, among other things, the following amendments
to the Plan Framework Support Agreement that are independent of continued
Creditors' Committee support: (i) a prohibition on the ability of the Issuer
and the Investors to terminate the Plan Framework Support Agreement after a
disclosure statement is approved and (ii) certain provisions related to
interest on trade and other unsecured claims. The PFSA Amendment and Supplement
also involves, among other things, certain modifications to the Plan Framework
Support Agreement that are contingent on continued Creditors' Committee support
that relate to the ability of the Creditors' Committee to review and consult
with respect to certain documents that will be included as part of the
implementation of a plan of reorganization of the Issuer and executive
compensation arrangements. Copies of the Supplements have been filed as
Exhibits 14 and 15 to the Schedule 13D/A filed by Appaloosa on January 18,
2007.
On January 11 and January 12, 2007, the Bankruptcy Court held a hearing on
Delphi's motion for, among other things, the approval of the Investment
Agreement, the Plan Framework Support Agreement and the Supplements. On January
12, 2007, the Bankruptcy Court approved such motion and on January 18, 2007,
the modified Investment Agreement and the Supplements were executed by the
parties thereto.
On February 28, 2007, the Issuer and the Investors entered into an amendment
(the "Investment Agreement Amendment") to the previously disclosed Investment
Agreement. Pursuant to the terms of the Investment Agreement Amendment, the
date by which the Issuer, Dolce or ADAH have the right to terminate the
Investment Agreement on account of the Issuer not having completed tentative
labor agreements with the Issuer's principal U.S. labor unions and a consensual
settlement of legacy issues with GM was extended. The Investment Agreement
Amendment provides that the day-to-day right to terminate will continue beyond
February 28, 2007 through a future date to be established pursuant to a 14 day
notice mechanism set forth in the Investment Agreement Amendment. The Issuer,
Dolce and ADAH also agreed not to exercise such termination right before March
15, 2007. The Investment Agreement Amendment also extends the deadline to make
certain regulatory filings under the federal antitrust laws in connection with
the framework transaction. A copy of the Investment Agreement Amendment was
filed as Exhibit 99(a) to the Form 8-K filed by Delphi Corporation on February
28, 2007.
Except as described in this Item 4 or otherwise described in this Statement,
the Reporting Persons currently have no plans or proposals which relate to or
would result in any transaction, event or action enumerated in paragraphs (a)
through (j) of Item 4 of the form of Schedule 13D promulgated under the
Securities Exchange Act of 1934, as amended. Subject to the terms of the
Investment Agreement and the Plan Framework Support Agreement, each of the
Reporting Persons reserves the right, in light of its or his ongoing evaluation
of the Issuer's financial condition, business, operations and prospects, the
market price of the Common Stock, conditions in the securities markets
generally, general economic and industry conditions, its or his business
objectives and other relevant factors, to change its or his plans and
intentions at any time, as it or he deems appropriate. In particular, and
without limiting the generality of the foregoing (but subject to the terms of
the Confidentiality Agreement), any one or more of the Reporting Persons (and
their respective affiliates) reserves the right, in each case subject to any
applicable limitations imposed on the sale of any of their Common Stock by the
Securities Act of 1933, as amended, or other applicable law, to (i) purchase
additional shares of Common Stock or other securities of the Issuer, (ii) sell
or transfer shares of Common Stock or other securities beneficially owned by
them from time to time in public or private transactions and (iii) cause any of
the Reporting Persons to distribute in kind to their respective stockholders,
partners or members, as the case may be, shares of Common Stock or other
securities owned by such Reporting Persons.
This Amendment is not a solicitation for votes on the Issuer's plan of
reorganization. No disclosure statement has been approved by the Bankruptcy
Court for the Issuer's plan of reorganization.
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 11 of 16
--------------------- -----------------
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Item 5 is amended and restated as follows:
(a) - (b) Set forth in the table below is the number and percentage of
shares of Shares beneficially owned by each Reporting Person as of March
12, 2007:
------------------------------------------------------------------------------------------------------------------
Number of Shares
Beneficially Owned with Number of Shares owned Aggregate Number of
Sole Voting and with Shared Voting and Shares Beneficially
Dispositive Power Dispositive Power Owned(1)
------------------------------------------------------------------------------------------------------------------
Merrill Lynch & Co., Inc. 0 1,475,701 1,475,701
------------------------------------------------------------------------------------------------------------------
Merrill Lynch, Pierce, Fenner &
Smith Incorporated 1,468,386 0 1,468,386
------------------------------------------------------------------------------------------------------------------
Merrill Lynch Financial
Markets, Inc. 515 0 515
------------------------------------------------------------------------------------------------------------------
Merrill Lynch Bank & Trust Co.,
FSB 6,635 0 6,635
------------------------------------------------------------------------------------------------------------------
Merrill Lynch International 165 0 165
------------------------------------------------------------------------------------------------------------------
------------
(1) Pursuant to Rule 13d-5(b)(1), as a result of the proposal and related
agreements described in Item 4, the Reporting Persons may be deemed to be
the beneficial owners of Shares beneficially owned by the other persons
described in Item 4. Based on information provided in its Schedule 13D/A,
filed on March 12, 2007, Appaloosa Management L.P. and its related
entities beneficially own 52,000,000 Shares (9.26% of the outstanding
Shares); based on information provided in its Schedule D filed on December
22, 2006, Harbinger Capital Partners Master Fund I, Ltd. and its related
entities beneficially own 26,450,000 Shares (4.71% of the outstanding
Shares), and based on information provided in its Schedule 13D, filed on
January 8, 2007, UBS Securities LLC and its related entities beneficially
own 4,422,207 Shares (0.79%). The total percentage of the outstanding
Shares beneficially owned by the group is 15.02%.
(c) The information set forth in Item 3 of the Initial Schedule 13D is
hereby incorporated by reference herein. Except as disclosed in Item 4 of
the Initial Schedule 13D, none of the Reporting Persons, nor, to the best
knowledge of the Reporting Persons, any of the directors or executive
officers of the Reporting Persons has effected any transaction in the
Common Stock in the 60 days prior to the filing of this Amendment No. 2 to
the Schedule 13D, other than (1) brokerage transactions by MLPF&S and its
affiliates on behalf of their customers, (2) market making transactions by
MLPF&S and its affiliates occurring prior to March 12, 2007 and (3) such
transactions as are noted on Schedule VI hereto, which is incorporated by
reference in its entirety into this Item 5(c).
(d) Not applicable.
(e) Not applicable.
* * *
Other than as described in this Statement, to the best knowledge of the
Reporting Persons there are no contracts, arrangements, understandings or
relationships (legal or otherwise) among the Reporting Persons, and between any
such persons and any other person, with respect to any securities of the
Issuer, including but not limited to, transfer and voting of any of the
securities, finder's fees, joint ventures, loan or option arrangements, puts or
calls, guarantees of profits, division of profits or loss, or the giving or
withholding of proxies, or a pledge or contingency the occurrence of which
would give another person voting power or investment power over the securities
of the Issuer.
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 12 of 16
--------------------- -----------------
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Item 7 is amended and restated as follows:
EXHIBIT DESCRIPTION
------------ -----------------------------------------------------------
7.1 Joint Filing Agreement, dated as of December 28, 2006, by
and among Merrill Lynch & Co., Inc., Merrill Lynch, Pierce,
Fenner & Smith Incorporated, Merrill Lynch Financial
Markets, Inc., Merrill Lynch Bank & Trust Co., FSB and
Merrill Lynch International (incorporated by reference to
Exhibit 1 to the Statement on Schedule 13 D filed by
Merrill Lynch & Co., Inc., Merrill Lynch, Pierce, Fenner &
Smith Incorporated, Merrill Lynch Financial Markets, Inc.,
Merrill Lynch Bank & Trust Co., FSB and Merrill Lynch
International on December 28, 2006).
7.2 Confidential Information, Standstill And Nondisclosure
Agreement, dated as of July 31, 2006, by and among Delphi
Corporation, Appaloosa Management L.P., and Harbinger
Capital Partners Master Fund I, Ltd. (incorporated by
reference to Exhibit 3 to the Amendment to the Statement on
Schedule 13D filed by Appaloosa Management L.P. on August
1, 2006).
7.3 Amended Confidential Information, Standstill and
Nondisclosure Agreement, dated as of August 25, 2006, by
and among Appaloosa Management L.P. and Harbinger Capital
Partners Master Fund I, Ltd. (incorporated by reference to
Exhibit 6 to the Amendment to the Statement on Schedule 13D
filed by Appaloosa Management L.P. on August 29, 2006).
7.4 Engagement Letter, dated as of July 31, 2006, by and among
UBS Securities LLC, Appaloosa Management L.P. and Harbinger
Capital Partners Master Fund I, Ltd. (incorporated by
reference to Exhibit 4 to the Amendment to the Statement on
Schedule 13D filed by Appaloosa Management L.P. on August
1, 2006).
7.5 Engagement Letter, dated as of July 31, 2006, by and among
Merrill Lynch & Co. Appaloosa Management L.P. and Harbinger
Capital Partners Master Fund I, Ltd. (incorporated by
reference to Exhibit 5 to the Amendment to the Statement on
Schedule 13D filed by Appaloosa Management L.P. on August
1, 2006).
7.6 Proposal Letter (attaching form of Equity Purchase and
Commitment Agreement and Equity Commitment Letters) dated
December 18, 2006 (incorporated by reference to Exhibit
99.E to the Current Report on Form 8-K filed by Delphi
Corporation on December 18, 2006).
7.7 Plan Framework Support Agreement, dated December 18, 2006,
among Delphi Corporation, General Motors Corporation,
Appaloosa Management L.P., Cerberus Capital Management,
L.P., Harbinger Capital Partners Master Fund I, Ltd.,
Merrill Lynch, Pierce, Fenner & Smith Incorporated and UBS
Securities LLC (incorporated by reference to Exhibit 99.A
to the Current Report on Form 8-K filed by Delphi
Corporation on December 18, 2006).
7.8 Agreement of Limited Partnership of Del A-2 L.P., dated
December 18, 2006, among A-D GP Management, LLC, Appaloosa
Investment L.P. I, Palomino Fund Ltd., Harbinger Del-Auto
Investment Company, Ltd. and Merrill Lynch, Pierce, Fenner
& Smith Incorporated (incorporated by reference to Exhibit
9 to the Amendment to the Statement on Schedule 13D filed
by Appaloosa Management L.P. on December 19, 2006).
7.9 Commitment Letter from Harbinger Capital Partners Master
Fund I, Ltd. to Harbinger Del-Auto Investments Company,
Ltd. and DEL A-2 L.P. (incorporated by reference to Exhibit
10 to the Amendment to the Statement on Schedule 13D filed
by Appaloosa Management L.P. on December 19, 2006).
7.10 Contribution and Reimbursement Agreement, dated December
18, 2006, between Appaloosa Management L.P. and Cerberus
Capital Management L.P. (incorporated by reference to
Exhibit 11 to the Amendment to the Statement on Schedule
13D filed by Appaloosa Management L.P. on December 19,
2006).
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 13 of 16
--------------------- -----------------
EXHIBIT DESCRIPTION
------------ -----------------------------------------------------------
7.11 Contribution and Reimbursement Agreement, dated December
18, 2006, among Appaloosa Management L.P., Harbinger
Capital Partners Master Fund I, Ltd., Harbinger Capital
Partners Special Situations Fund, L.P., Merrill Lynch,
Pierce, Fenner & Smith, Incorporated and UBS Securities LLC
(incorporated by reference to Exhibit 12 to the Amendment
to the Statement on Schedule 13D filed by Appaloosa
Management L.P. on December 19, 2006).
7.12 Form of Equity Purchase and Commitment Agreement, dated
January __, 2007, among A-D Acquisition Holdings, LLC,
Harbinger Del-Auto Investment Company, Ltd., Dolce
Investments LLC, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, UBS Securities LLC and Delphi Corporation
(incorporated by reference to Exhibit 13 to the Amendment
to the Statement on Schedule 13D filed by Appaloosa
Management L.P. on January 18, 2007).
7.13 Form of Supplement to the Equity Purchase and Commitment
Agreement, dated January __, 2007, among A-D Acquisition
Holdings, LLC, Harbinger Del-Auto Investment Company, Ltd.,
Dolce Investments LLC, Merrill Lynch, Pierce, Fenner &
Smith Incorporated, UBS Securities LLC and Delphi
Corporation (incorporated by reference to Exhibit 14 to the
Amendment to the Statement on Schedule 13D filed by
Appaloosa Management L.P. on January 18, 2007).
7.14 Form of Amendment and Supplement to the Plan Framework
Support Agreement, dated January __, 2007, among Delphi
Corporation, General Motors Corporation, Appaloosa
Management L.P., Cerberus Capital Management, L.P.,
Harbinger Capital Partners Master Fund I, Ltd., Merrill
Lynch, Pierce, Fenner & Smith, Incorporated and UBS
Securities LLC (incorporated by reference to Exhibit 15 to
the Amendment to the Statement on Schedule 13D filed by
Appaloosa Management L.P. on January 18, 2007).
7.15 Amendment to the Equity Purchase and Commitment Agreement
dated February 28, 2007, by and among Delphi Corporation,
A-D Acquisition Holdings, LLC, Harbinger Del-Auto
Investment Company, Ltd., Dolce Investments LLC, Merrill
Lynch, Pierce, Fenner & Smith, Incorporated and UBS
Securities LLC (incorporated by reference to Exhibit 99(a)
to the Form 8-K filed by Delphi Corporation on February 28,
2007).
7.16 Power of attorney, dated as of January 29, 2007, by Merrill
Lynch & Co., Inc., Merrill Lynch, Pierce, Penner & Smith
Incorporated, Merrill Lynch Financial Markets, Inc.,
Merrill Lynch Bank & Trust Co., FSB and Merrill Lynch
International.
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 14 of 16
--------------------- -----------------
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify
that the information set forth in this statement is true, complete and correct.
Dated: March 16, 2007
MERRILL LYNCH & CO., INC.
By: /s/ Cara Londin
-------------------------------
Name: Cara Londin
Title: Assistant Secretary
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By: /s/ Cara Londin
-------------------------------
Name: Cara Londin
Title: Assistant Secretary
MERRILL LYNCH FINANCIAL MARKETS, INC.
By: /s/ Cara Londin
-------------------------------
Name: Cara Londin
Title: Attorney-in-fact
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 15 of 16
--------------------- -----------------
MERRILL LYNCH BANK & TRUST CO., FSB
By: /s/ Cara Londin
-------------------------------
Name: Cara Londin
Title: Attorney-in-fact
MERRILL LYNCH INTERNATIONAL
By: /s/ Cara Londin
-------------------------------
Name: Cara Londin
Title: Attorney-in-fact
--------------------- -----------------
CUSIP No. 247126105 Schedule 13D Page 16 of 16
--------------------- -----------------
SCHEDULE VI
--------------------------------------------------------------------------------
PURCHASE (P)/ TRADE DATE PRICE QUANTITY
SALE(S)/OTHER (O)
--------------------------------------------------------------------------------
S 11/2/2006* $2.73 698
--------------------------------------------------------------------------------
P 11/2/2006 $2.66 9,089
--------------------------------------------------------------------------------
P 11/7/2006 $2.04 30,000
--------------------------------------------------------------------------------
S 11/7/2006 $2.1283 30,000
--------------------------------------------------------------------------------
P 11/7/2006 $2.025 30,000
--------------------------------------------------------------------------------
S 11/7/2006 $2.1433 30,000
--------------------------------------------------------------------------------
S 11/9/2006* $2.45 65
--------------------------------------------------------------------------------
P 11/15/2006 $2.28 2,853
--------------------------------------------------------------------------------
S 11/15/2006 $2.28 2,853
--------------------------------------------------------------------------------
S 11/21/2006* $2.21 19
--------------------------------------------------------------------------------
S 11/21/2006* $2.21 78
--------------------------------------------------------------------------------
S 11/21/2006* $2.18 27
--------------------------------------------------------------------------------
S 11/30/2006* $2.33 339
--------------------------------------------------------------------------------
P 12/11/2006 $3.186 250,950
--------------------------------------------------------------------------------
S 12/11/2006 $3.194 1,673,000
--------------------------------------------------------------------------------
S 12/11/2006 $3.379138 1,673,000
--------------------------------------------------------------------------------
P 12/12/2006 $3.0753 832,050
--------------------------------------------------------------------------------
P 12/18/2006* $2.65 100,000
--------------------------------------------------------------------------------
P 12/19/2006* $2.6548 490,000
--------------------------------------------------------------------------------
P 1/09/2007 $3.40 30,000
--------------------------------------------------------------------------------
P 1/12/2007** $2.88 284
--------------------------------------------------------------------------------
P 1/12/2007** $3.05 1,000
--------------------------------------------------------------------------------
S 1/16/2007** $2.97 1,000
--------------------------------------------------------------------------------
S 1/16/2007** $3.07 284
--------------------------------------------------------------------------------
S 1/18/2007* $3.24 175
--------------------------------------------------------------------------------
S 1/18/2007* $3.24 174
--------------------------------------------------------------------------------
P 1/19/2007+ $2.50 150,000
--------------------------------------------------------------------------------
P 1,577*
--------------------------------------------------------------------------------
P 1/31/2007** $2.79 350
--------------------------------------------------------------------------------
S 2/1/2007* $2.72 58
--------------------------------------------------------------------------------
S 2/2/2007** $2.65 350
--------------------------------------------------------------------------------
P 2/5/2007* $2.77 500
--------------------------------------------------------------------------------
S 2/9/2007* $2.86 69
--------------------------------------------------------------------------------
S 2/22/2007** $2.66 69
--------------------------------------------------------------------------------
P 2/22/2007** $2.65 69
--------------------------------------------------------------------------------
P 3/5/2007* 66
--------------------------------------------------------------------------------
S 3/8/2007* $2.56 25
--------------------------------------------------------------------------------
* These transactions were entered into in order to facilitate a
transaction for the account of a customer.
** These transactions reflect the purchase and sales of shares by
MLPF&S's error correction section to correct errors made in connection
with trades made on behalf of clients. The following sales were all
matchable with MLPF&S purchase of 150,000 shares at a price of $2.50
per share pursuant to its exercise of options and January 19, 2007:
(i) the sale of 284 shares on January 16, 2007 at $3.07 per share,
(ii) the sale of 1,000 shares on January 16, 2007 at $2.97 per share,
(iii) the sale of 350 shares on February 2, 2007 at $2.65 per share
and (iv) the sale of 69 shares on February 22, 2007 at $2.66 per
share. As a result, the Reporting Persons have paid Delphi Corporation
an aggregate of $695.42, representing the full amount of the profits
realized in connection with the short-swing transactions.
+ This transaction reflects the exercise of an option to purchase
shares.