(Source: Detroit Free Press)
By Jewel Gopwani, Detroit Free Press
Jun. 30--Southfield-based auto supplier Lear Corp. has until the end of the day to make an interest payment to its bondholders and to reach a deal with its banks to stay out of bankruptcy.
Lear, the world's second-largest automotive seatmaker, is one of several suppliers that has run into financial trouble as auto sales plummeted, pushing it to the brink of a Chapter 11 filing.
More than a dozen auto suppliers have filed for bankruptcy reorganization in the United States this year, as they struggle to maintain the terms of their loan agreements amid falling revenues.
Lear defaulted on its credit agreements last year when the company tapped a $1.2-billion credit line and did not repay money owed on that credit line. Since then, the company has negotiated two waivers with its banks. The latest one expires today.
Also today, time will run out for Lear to make a $38-million interest payment to its bondholders.
Lear spokesman Mel Stephens declined to comment on the status of Lear's talks with banks and bondholders.
Novi-based Cooper-Standard Automotive Inc. might face a similar fate.
Cooper-Standard, which employs 840 in Michigan, makes parts to move fluid through vehicles, sealing products and suspension and powertrain parts. The privately held supplier said this month it would hold off on making an interest payment to bondholders, using a 30-day grace period to talk to its banks and cut its debt.
"We're still engaged in discussions with our lenders and stakeholders," Cooper-Standard spokeswoman Sharon Wenzl said.
Contact JEWEL GOPWANI: 313-223-4550 or jgopwani@freepress.com
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