Lear Corp. says it will file for Chapter 11 bankruptcy protection, now that it has reached an agreement in principle regarding debt restructuring with its secured lenders and bondholders.
Lear says its trade creditors will be paid in full.
The bankruptcy filing will cover certain Lear subsidiaries in the U.S. and Canada, but operations outside those countries will be excluded. The seat, electrical systems and electronics products supplier says its overseas operations are “well-capitalized, well-positioned and have a strong backlog of new business.”
Lear is seeking support for its restructuring plan from additional lenders and bondholders.
Meanwhile, it has secured commitments from a syndicate of lenders, headed by J.P. Morgan and Citigroup, for $500 million in debtor-in-possession financing to see it through the bankruptcy process. The DIP financing will convert to exit financing with a 3-year term once Lear emerges from Chapter 11.
“We want to assure everyone – customers, suppliers, employees, and the communities of which we are a part – that Lear is committed to positioning our business for sustainable success,” says Chairman, President and CEO Bob Rossiter. “We believe that the agreement in principle with the steering committees of our secured lenders and bondholders to support our plan of reorganization will enable us to emerge expeditiously.”
Southfield, MI-based Lear, the largest supplier to file bankruptcy so far this year, employs 80,000 people at 210 facilities in 36 countries.