By Ryan Beene, Crain's Detroit Business
Detroit, Michigan -- Lear Corp. is looking to raise at least $450 million in new capital to begin to remove and reduce some of its post-Chapter 11 debt load, the company said in a regulatory filing Wednesday.
The Southfield-based supplier of automotive seating systems and vehicle electronics components is seeking permission from some of its lenders for a new revolving credit line worth $100 million-$125 million. It also wants to raise at least $350 million through a new bond sale.
Lear cfo Matt Simoncini said the plan is to use bond sale proceeds, combined with some of its $1600 million in cash, to pay off its second lien agreement.
The company still has a first lien, which prevents the company from issuing quarterly dividends to shareholders.
J.P. Morgan analyst Himanshu Patel speculated in a research note today that the transactions, which would give Lear nearly $2000 million in liquidity, could be used to pay off both company liens, paving the way for a one-time special dividend.
Simoncini denied that was the plan.
"To me it makes no sense to do a one-time dividend," Simoncini said.
Industry conditions must continue to improve before the company would pay off its first lien. Then, it will be able to pay regular quarterly dividends.