(Southfield, Michigan) /PRNewswire-FirstCall/ -- Lear Corporation (OTC: LR), a global supplier of automotive seating systems, electrical distribution systems and electronic products, says it has received the support it was seeking from its bank lenders and bondholders to move forward with its previously announced debt restructuring plan.
To implement the restructuring the company and certain of its U.S. and Canadian subsidiaries have filed for Chapter 11 bankruptcy.
Lear's subsidiaries outside the U.S. and Canada are not part of the Chapter 11 filings.
Under the proposed restructuring plan, which needs to be approved by the court, Lear's trade creditors will be paid in full subject to certain limited exceptions. To this end, the company has filed motions seeking to continue to pay trade creditors under normal terms in the ordinary course of business. Lear also said that it has sought approval from the bankruptcy court to continue to provide pay and benefits to its employees worldwide without interruption and to continue its normal course funding of its pension obligations in the U.S. and Canada.
On July 1, the company said it had reached an agreement in principle regarding a consensual debt restructuring with steering committees representing its secured lenders and its bondholders. At that time, the plan had the support of a majority of the members of a steering committee of the Company's secured lenders and a steering committee of bondholders acting on behalf of an ad hoc group of bondholders. Since then, the Company has secured support from additional secured lenders and bondholders and has entered into agreements supporting the restructuring plan with approximately 68% in principal amount of its secured lenders and more than 50% in principal amount of its bondholders.
“Our goal is to emerge from this process quickly and with an appropriate capital structure to support our long-term business objectives as a leading global competitor with the financial flexibility to build on our strengths and take advantage of future growth opportunities,” said Bob Rossiter, Lear's chairman, chief executive officer and president.
Lear previously announced commitments from a syndicate of secured lenders, led by J.P. Morgan and Citigroup, for $500 million in new money debtor-in-possession (DIP) financing. The proposed DIP financing, subject to customary conditions, provides additional financial flexibility that supplements Lear's significant existing cash balances. Additionally, the DIP agreement includes provisions that, subject to certain conditions, provide for exit financing upon Lear's emergence from Chapter 11.
Lear Corporation manufactures automotive seating systems, electrical distribution systems and electronic products. The company has 80,000 employees at 210 facilities in 36 countries. Lear is based in Southfield, Michigan. For more information about the company visit http://www.lear.com/index.jsp
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