Czar Nicholas II of Russia
Car Czar Consulting says: Stock value in Lear LEA tanked today to 41 cents per share after-hours on BK rumors, which appeared to be verified after-hours today.
Lear prepared to file for bankruptcy next week: report Thursday June 25, 2009, 4:58 pm EDT
(Reuters) Lear Corporation (LEA – News) is preparing to file for bankruptcy as soon as next week, the Wall Street Journal reported on Thursday, citing people familiar with the matter. The news comes as Lear faces a June 30 window, through which its lenders have agreed to waive the existing defaults under its primary credit facility.
Lear, which warned in March it might have to file for bankruptcy, has been exploring alternatives to restructure its debt outside of bankruptcy over the past months.
Lear spokesman Mel Stephens declined to comment. The Journal reported that Lear had been in talks with banks in recent days for debtor-in-possession loans, the funding companies typically use to finance their stays in bankruptcy court. JPMorgan Chase (JPM – News) and Citigroup (NYSE:C – News) will provide the bulk of the loan, according to the report. Shares of Lear closed down 39 percent, or 34 cents, at 54 cents on the New York Stock Exchange before the news.
Southfield, Michigan-based Lear was in breach of its leverage covenants at the end of 2008 after borrowing all of the $1.2 billion available to it under the primary credit facility during the fourth quarter.
It had $3.5 billion of outstanding debt at the end of 2008, according to a filing with the Securities and Exchange Commission.
Lear, which makes seating and electrical equipment for vehicles, has suffered because of steep production cuts by General Motors Corp (Other OTC:GMGMQ.PK – News) and Ford Motor Co (NYSE:F – News), which accounted for 42 percent of its global revenue in 2008.
U.S. auto sales fell 36.5 percent in the first five months of 2009 to their lowest level in nearly three decades.
The U.S. auto parts sector, already teetering on the brink of failure, has come under further pressure after Chrysler shut down nearly all of its production for the duration of its bankruptcy reorganization.
GM, which filed for bankruptcy on June 1, has also idled 13 assembly plants in North America for as long as nine weeks starting in mid-May.
News Releases
Lear Elects to Exercise 30-Day Grace Period for Pending Interest Payments |
SOUTHFIELD, Mich., June 1 /PRNewswire-FirstCall/ — Lear Corporation (NYSE: LEA), a leading global supplier of automotive seating systems, electrical distribution systems and electronic products, announced today that it has chosen not to make semi-annual interest payments of approximately $38 million due on June 1, 2009 with respect to its 8.50% Senior Notes due in 2013 and 8.75% Senior Notes due in 2016. Instead, the Company is utilizing the 30-day grace period applicable to the interest payments while it continues discussions regarding a capital restructuring with its lenders and others. Under the applicable indentures relating to the Senior Notes, the use of the 30-day grace period does not constitute a default that permits acceleration of the Senior Notes or any other indebtedness.
(Logo: http://www.newscom.com/cgi-bin/prnh/20080520/LEARCORPLOGO )
On May 13, 2009, Lear entered into an amendment and waiver under its primary credit facility. Under the terms of the amendment and waiver, the waiver of covenant defaults under the primary credit facility would terminate if the Company were to make any payments with respect to the Senior Notes. For additional information regarding the Senior Notes, our other debt obligations and risks related to our capital restructuring, please refer to our reports filed with the Securities and Exchange Commission.
Lear Corporation is one of the world’s leading suppliers of automotive seating systems, electrical distribution systems and electronic products. The Company’s world-class products are designed, engineered and manufactured by a diverse team of 80,000 employees at 210 facilities in 36 countries. Lear’s headquarters are in Southfield, Michigan, and Lear is traded on the New York Stock Exchange under the symbol [LEA]. Further information about Lear is available on the Internet at http://www.lear.com.
Photo: http://www.newscom.com/cgi-bin/prnh/20080520/LEARCORPLOGO
SOURCE: Lear Corporation
Web site: http://www.lear.com/
[...] Seat-maker Lear Corporation (Stock Symbol: LEA) Readies Bankruptcy …For additional information regarding the Senior Notes, our other debt obligations and risks related to our capital restructuring, please refer to our reports filed with the Securities and Exchange Commission. … [...]