Delphi investment plan approved

Delphi Corp. received approval today for a new plan to recapitalize the company.

The U.S. Bankruptcy Court for the Southern District of New York accepted an agreement for an equity group to invest as much as $2.55 billion in preferred and common equity to reorganize Delphi. The group is led by Appaloosa Management LP, Harbinger Capital Partners and Pardus Capital Management LP.

The transaction has been in the works for several weeks.

Delphi hopes to emerge from bankruptcy protection this year. The auto supplier put its U.S. operations in Chapter 11 in October 2005.

Delphi is shedding all but eight of its 29 U.S. plants as it seeks to reorganize into a mostly overseas supplier of electronics.

Delphi, of suburban Detroit, ranks No. 2 on the Automotive News list of the top 100 global suppliers, with worldwide original-equipment automotive parts sales of $24.40 billion in 2006.