(Reuters) - U.S. auto parts maker Lear Corp filed for Chapter 11 bankruptcy protection on Tuesday, a day after setting out plans to restructure its $3.6 billion debt burden under a proposed deal with creditors.
Lear, which has been weighed down by heavy debts and a sharp decline in automobile demand, said the reorganization had won the support of the majority of its creditors and it expected to submit the proposals to the bankruptcy court in coming days.
Under the plans set out on Monday, Lear would convert $3.6 billion in debt into a combination of new debt, convertible stock and equity warrants. But at that point it did not give a timetable for the bankruptcy proceedings.
The company now says its bankruptcy plan -- the largest in a string of failures of auto parts suppliers -- was supported by about 68 percent in principal amount of its secured lenders and more than 50 percent in principal amount of its bondholders.
"We intend to proceed on an expedited basis and expect to submit the plan to the Bankruptcy Court within 60 days," Lear Chief Executive Bob Rossiter said in a statement.
The company said last week it would file for Chapter 11 protection and its restructuring plan had the support of key secured lenders and bondholders.
The group had warned in March it might have to file for bankruptcy as some of its automaker customers struggle with bankruptcy themselves.
Lear had breached its leverage covenants at the end of 2008 after borrowing all of the $1.2 billion in its main credit facility.
Lear, which makes seating and electrical equipment for vehicles, made its filing in the U.S. bankruptcy court for the Southern District of New York, listing total assets of about $1.27 billion and total liabilities of about $4.54 billion.
The company suffered due to steep production cuts by General Motors Corp
Lear's subsidiaries outside the United States and Canada are not part of the Chapter 11 filings.
(Reporting by Ajay Kamalakaran and Hezron Selvi in Bangalore; Editing by David Holmes)
