Jul. 18, 2009 (United Press International) -- General Motors Co. and lenders of bankrupt Delphi Corp. (OOTC:DLPIV) (OOTC:DPHIQ) are close to a deal to purchase most of the U.S. parts maker's assets, sources say.

Quoting unnamed sources close to the proposed deal, Saturday's Detroit Free Press reported the Troy, Mich., auto parts supplier would be taken out of bankruptcy as part of the agreement, which would replace a June 1 purchase deal between GM and the Los Angeles private equity fund Platinum Equity.

That $3.6 billion proposal had the wholehearted backing of GM and Delphi, but was opposed by Delphi's lenders -- including the hedge fund Elliott & Associates of New York, which holds $800 million of Delphi's $3.5 billion bankruptcy loan -- because it only paid 20 cents on the dollar for part of their investment, the Free Press said.

The newspaper said its sources contend the lenders are set to sign off on a new proposal they have submitted, and that an auction for Delphi's assets scheduled for Friday was delayed until Tuesday to give the parties involved more time to finalize the transaction.

GM, which recently from bankruptcy itself, says it needs Delphi to keep parts flowing to its assembly lines.