AUTO-PARTS maker Delphi, in a court ruling that will relieve it of billions of dollars in pension liabilities, has won approval to change agreements with former parent General Motors.

Bankruptcy judge Robert Drain approved the changes in New York after Michigan-based Delphi reached an agreement on the changes with the committee of unsecured creditors that had opposed them. 'All's well that ends well,' creditors attorney Robert Rosenberg told Drain after withdrawing his objection to the changes, which boost GM's financial contributions to Delphi to US$10.6 billion from US$6 billion.

The company will file changes to its turnaround plan as soon as possible and look to raise exit financing, Delphi attorney John Butler Jr said. He declined to describe the capital structure the reorganized company would have but called the court ruling 'a major milestone.'

Drain's approval means Detroit-based GM is to take on US$3.4 billion of Delphi's pension liabilities, preventing the federal Pension Benefit Guaranty Corp from putting a lien on Delphi's foreign assets.

Drain also gave approval for GM to loan Delphi an additional US$300 million on top of an existing US$650-million loan., Bloomberg News said.

Creditors had opposed the reorganization plan, saying Delphi was giving away control to GM.

Under the plan, GM's US$2.1-billion administrative claim in the bankruptcy is to be paid with preferred stock.

Under the proposed terms of the settlement, GM would convert preferred stock to common stock and grant it to creditors to provide them a 20-percent return if they don't get at least 20 cents on the dollar for their claims, Butler said.