The rights offering will form the basis of its reorganization plan, the company said in a statement.
Funds managed by Strategic Value Partners, Wayzata Investment Partners and Stark Investments, which collectively own more than $225 million of unsecured claims against Tower, have agreed to backstop the offering to accredited unsecured creditors while buying shares from the offering.
The commitment is subject to bankruptcy court approval, Tower said.
"This commitment letter with its significant equity investment from our bondholders represents a major step toward completing our reorganization plan," Chief Executive Kathleen Ligocki said in the statement.
The Novi, Mich.,-based company also said it was continuing discussions with lenders on a plan for the maturity of its current debtor-in-possession facility, which expires in February.
Tower was the first of the large U.S. auto parts suppliers to file for bankruptcy in 2005, hurt by high steel costs and production cuts at U.S. automakers, which accounted for nearly three-quarters of its North American business.