SOURCE: Delphi Corporation

January 29, 2007 08:34 ET

Delphi Signs Sale Agreement for Brake Hose Business

Files Motion to Request Hearing With the Bankruptcy Court

TROY, MI -- (MARKET WIRE) -- January 29, 2007 -- Delphi Corporation (PINKSHEETS: DPHIQ) has entered into an asset sale and purchase agreement with Harco Manufacturing Group, LLC for the sale of its brake hose business, company officials announced today. Pursuant to the procedures outlined in the Bankruptcy Code, the company filed a motion with the U.S. Bankruptcy Court for the Southern District of New York to request a bidding procedures hearing on Feb. 15, 2007.

Following the completion of the bidding procedure process, a final sale hearing is anticipated to be set for March 22, 2007. The final sale of the Delphi Brake Hose business is subject to the approval of the U.S. Bankruptcy Court, and waiver of any "no sale" clause in any agreements between Delphi and the Steel Workers of America, Local 87L, AFL-CIO/CLC.

As outlined in the court filing, the asset sale and purchase agreement between Delphi and Harco includes:

--  Machinery and equipment
--  Intellectual property
--  Assignment and assumption of certain customer contracts
The sale agreement does not include any real estate/production facility or the transfer of the Delphi workforce to Harco. Under a manufacturing services agreement, Delphi would continue to produce brake hose products for a maximum of 12 months or until such earlier time as the transition of the business line is completed.

More information on this agreement and the court filing is available at


This press release, as well as other statements made by Delphi may contain forward-looking statements that reflect, when made, the Company's current views with respect to current events and financial performance. Such forward-looking statements are and will be, as the case may be, subject to many risks, uncertainties and factors relating to the Company's operations and business environment which may cause the actual results of the Company to be materially different from any future results, express or implied, by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: the ability of the Company to continue as a going concern; the ability of the Company to operate pursuant to the terms of the debtor-in-possession financing facility; the Company's ability to obtain Court approval with respect to motions in the chapter 11 cases prosecuted by it from time to time; the ability of the Company to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the chapter 11 cases; the Company's ability to satisfy the terms and conditions of the Equity Purchase and Commitment Agreement; the Company's ability to satisfy the terms and conditions of the Plan Framework Support Agreement (including the Company's ability to achieve consensual agreements with GM and its U.S. labor unions on a timely basis that are acceptable to the Plan Investors in their sole discretion); risks associated with third parties seeking and obtaining Court approval to terminate or shorten the exclusivity period for the Company to propose and confirm one or more plans of reorganization, for the appointment of a chapter 11 trustee or to convert the cases to chapter 7 cases; the ability of the Company to obtain and maintain normal terms with vendors and service providers; the Company's ability to maintain contracts that are critical to its operations; the potential adverse impact of the chapter 11 cases on the Company's liquidity or results of operations; the ability of the Company to fund and execute its business plan (including the transformation plan described in Item 1. Business "Potential Divestitures, Consolidations and Wind-Downs" of the Annual Report on Form 10-K for the year ended December 31, 2005 filed with the SEC) and to do so in a timely manner; the ability of the Company to attract, motivate and/or retain key executives and associates; the ability of the Company to avoid or continue to operate during a strike, or partial work stoppage or slow down by any of its unionized employees and the ability of the Company to attract and retain customers. Additional factors that could affect future results are identified in the Annual Report on Form 10-K for the year ended December 31, 2005 filed with the SEC including the risk factors in Part I. Item 1A. Risk Factors, contained therein. Delphi disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events and/or otherwise.

Similarly, these and other factors, including the terms of any reorganization plan ultimately confirmed, can affect the value of the Company's various prepetition liabilities, common stock and/or other equity securities. Additionally, no assurance can be given as to what values, if any, will be ascribed in the bankruptcy cases to each of these constituencies. A plan of reorganization could result in holders of Delphi's common stock receiving no distribution on account of their interest and cancellation of their interests. In addition, under certain conditions specified in the Bankruptcy Code, a plan of reorganization may be confirmed notwithstanding its rejection by an impaired class of creditors or equity holders and notwithstanding the fact that equity holders do not receive or retain property on account of their equity interests under the plan. In light of the foregoing, the Company considers the value of the common stock to be highly speculative and cautions equity holders that the stock may ultimately be determined to have no value. Accordingly, the Company urges that appropriate caution be exercised with respect to existing and future investments in Delphi's common stock or other equity interests or any claims relating to prepetition liabilities.

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