Delphi files for chapter 11 bankruptcy.Delphi Corp., Troy, Mich., and 38 of its domestic subsidiaries filed for chapter 11 reorganization in October. The company's decision was based on preserving the value of Delphi and completing its transformation plan designed to resolve the company's existing legacy issues and the high cost of U.S. operations. "Our global operations Global Operations is a first-person shooter computer game developed by Barking Dog Studios and published by both Crave Entertainment and Electronic Arts. It was released in March of 2002, following its public multiplayer beta version which contained only the Quebec map. , both U.S. and non-U.S., will continue without interruption," said Robert S. "Steve" Miller, Delphi's chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "Our customers all over the world can be assured that we will continue to meet their scheduling, delivery and production needs in a timely manner." Delphis foreign subsidiaries were not included in the chapter 11 filing, allowing them to continue operations without U.S. court supervision and not be subject to chapter 11 requirements of the U.S. Bankruptcy Code Bankruptcy Code may refer to:
The company said it plans to finance its global operations with $4.5 billion in debt facilities plus additional committed and uncommitted financing lines and/or securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. facilities in Asia. Europe and the Americas. The financing includes a commitment in senior secured debtor in-possession (DIP) financing from a group of lenders. Proceeds of the DIP financing, along with cash generated from daily operations and cash on hand, will be used to fund post-petition operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. , such as supplier organizations and employee salaries. "We took this action because we are determined to achieve competitiveness for Delphi's core U.S. operations, and the key to accomplishing that goal is reducing these costs as soon as possible," said Miller. "We simply cannot afford to continue to be encumbered Encumbered A property owned by one party on which a second party reserves the right to make a valid claim, e.g., a bank's holding of a home mortgage encumbers property. by high legacy issues and burdensome restrictions under current labor agreements that impair our ability to compete. We also must realign re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. our global product portfolio and manufacturing footprint to preserve our core businesses. This will require a substantial segment of our U.S. manufacturing operations to be divested, consolidated or wound down through the chapter 11 process. "We believe the chapter 11 process will provide the flexibility to address our legacy issues and allow us to take advantage of the fundamental strength of our businesses." Delphi expects to complete its domestic restructuring and emerge from the chapter 11 protection by early to mid-2007. |
|
||||||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion