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March 6, 2008 -- General Motors Corp. agreed Wednesday to offer two loans worth almost $3 billion to help Delphi Corp. emerge from bankruptcy since the auto parts maker has struggled to secure the financing it needs.
GM said it would take a $2 billion first-lien term note and any unsubscribed portion of an $825 million second-lien term loan. The financing pact with GM could help Delphi move a step closer to emerging from bankruptcy-court protection. GM is highly dependent on Delphi for parts, forcing it to find a solution as a March 31 deadline approached to secure the loans or possibly lose an equity investment deal that is also crucial to a Chapter 11 exit.
The investors are split over whether to take the GM financing, so Delphi will ask a judge to confirm later this week that the terms of the proposed exit financing comply with the plan.
Source: AMT
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