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Delphi's progress towards its recovery appears to have hit problems with amendments to its restructuring plan which was announced only at the start of September. The new amendments include lower payments to its former parent, General Motors.

Changes to the restructuring plan announced yesterday include a cut in the proposed direct investment because of a reduction in the overall value of the company and less cash being available.

The $5.6 billion loan to Delphi negotiated by a consortium of banks led by JP Morgan is reduced to $3.7 billion

GM will now receive $750 million in cash, a similar sum in a second lien note and $1.2 billion in junior convertible preferred stock, rather than the one-off payment of $2.7 billion in cash that had been agreed.

Existing shareholders will no longer be included in the issue of new shares and payments to unsecured creditors are likely to be reduced.

GM and the investor group Appaloosa Management, which will control the group after the restructuring, have both agreed the changes, but the equity committee of smaller shareholders has indicated that it is likely to oppose them, and this could delay Delphi's prospects of emerging from the Chapter 11 bankruptcy protection.

Delphi shares fell by a third on the news of the changes.