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Bankrupt auto parts maker Delphi's [DPHIQ
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] board on Monday said it favored a bid put forward by its bankruptcy lenders for its assets over a rival bid by private equity firm Platinum Equity.
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], which had previously favored the Platinum Equity bid. Delphi, which has been in bankruptcy protection since 2005, was spun off by automaker GM in 1999.
The company's bankruptcy or debtor-in-possession (DIP) lenders, who are owed $3.5 billion, presented a credit bid to take over the parts supplier by converting funds they are owed into equity.
Those lenders include Elliott Management, Silver Point Capital and Monarch Alternative Capital. JPMorgan Chase is the agent for the bankruptcy loan.
The credit bid prevailed over an earlier bid from Platinum negotiated with the backing of the Obama administration's autos task force.
Platinum had said repeatedly it believed it had the only bid that would serve the interests of all the interested parties in resolving the long-running Delphi bankruptcy.
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Delphi said in the statement on Monday that the "pure credit bid" received from JPMorgan was designated the successful bid.
It also said that GM and Delphi's DIP lenders agreed to modify financing agreements with Delphi to provide sufficient liquidity for the auto parts supplier to emerge from bankruptcy.
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