US: Lear heading for Chapter 11 - report
Debt holders in auto interiors and electrical equipment specialist Lear are expecting the supplier to file for Chapter 11 bankruptcy protection in the next "several days", a US newspaper said on Thursday.
A debt holder told the New York Post that Lear, once General Motor's ninth-largest supplier, had too much debt and would not be able to restructure.
Lear is already in violation of its debt covenants with its largest lenders but has been granted a waiver that expires on Tuesday, the Post said.
The Michigan-based supplier has been unable to agree an out-of-court settlement with its debt holders, the paper added.
President Barack Obama's autos task force last week rejected requests for up to US$10bn in aid to suppliers struggling to cope with the downturn in domestic vehicle sales spurred by the credit crunch.
The New York Post noted that Barclays analyst Brian Johnson had last week cut his rating on Lear shares to "underweight" from "neutral," saying investors would be diluted even if the supplier was able to arrange an out of court restructuring.
Lear could not be reached imediately for comment.