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Troubled components group Delphi says that it has settled all of its outstanding issues with General Motors and will file its revised plan of reorganisation with the US Bankruptcy Court later today.

The agreement with GM covers supply contract issues, claims and counterclaims over the separation of Delphi from GM in 1999 and future relations between the vehicle maker and the supplier.

As party of the settlement of the issues between GM and Delphi, the components group will pay GM a $2.7 billion "cash distribution" which will be used to finance the pensions and employee buyout sums that GM has paid out. GM in return is paying Delphi a labour rate of $26 an hour on some contract work.

Delphi's new reorganisation plan which it will file with the Bankruptcy Court gives details of future dealings with unions and with GM over labour costs and legacy activities, and spells out Delphi's view of its future operations.

The company has said it will in future concentrate on six automotive business segments: controls and security; electrical and electronic architecture; entertainment and communications; powertrain; safety; and thermal management and controls. It has already sold some automotive operations, including brake components.

Delphi's CEO and president Rodney O'Neal said: "Today's filing of Delphi's plan of reorganization and disclosure statement is a significant milestone for our company."

Delphi sought Chapter 11 protection from bankruptcy from the US courts in October 2005 and its next hearing is due on 3 October. It has recently received $2.5 billion backing from private equity groups. Some analysts believe that Delphi ciould be rerady to emerge from bankruptcy protection as early as the end of this year.