NEW YORK (Reuters) - U.S. auto parts maker Lear Corp (LEAR.PK) 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.
The filing represents the largest in a string of recent failures of auto parts suppliers and highlights the pressure on the sector from sharply curtailed production and bankruptcies at automakers General Motors Corp (GMGMQ.PK) and Chrysler.
Lear 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.
"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.
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.
The bankruptcy plan was supported by about 68 percent in principal amount of its secured lenders and more than 50 percent in principal amount of its bondholders.
Lear, which makes seating and electrical equipment for vehicles, ranks as the 11th largest global auto parts supplier by sales according to trade journal Automotive News.
The company was founded in 1917. It first sold shares to the public in 1994 and expanded through a string of 18 major acquisitions since then.
But the growth left Lear carrying a heavy debt burden and exposed to the slump in demand for the big SUVs and trucks that had represented a large share of its business.
Though it had begun extensive restructuring in 2005 to move some manufacturing operations to low-cost labor countries and consolidate its operating facilities, the economic slowdown and steep production cuts by General Motors Corp (GMGMQ.PK) and Ford Motor Co (F.N) hurt Lear sales.