DETROIT -- Unless investor Wilbur Ross makes a last-minute pitch for Collins & Aikman Corp., it appears that the auto interiors supplier will emerge from Chapter 11 reorganization as a stand-alone company.
Collins & Aikman said in a U.S. Bankruptcy Court filing last week that it had agreed with its secured lenders to pay them by swapping debt for equity in the reorganized company.
The supplier intends to file a plan of reorganization by Thursday, Aug. 31, according to a petition last week asking for court approval to defer paying $7.2 million in monthly interest on its debts until January.
Collins & Aikman ranks No. 54 on Automotive News' list of the top 100 global suppliers. The company, based in suburban Detroit, has parts on virtually every vehicle made by the Detroit 3 automakers.
The reorganization plan could delay a much-needed consolidation of the North American interiors segment, said Kevin Tynan, an analyst for Argus Research Group in New York.
Consolidation would help interior suppliers firm up prices and eliminate underused machines.
Ross was viewed as the person most likely to buy Collins & Aikman because he had expressed an interest and had purchased the company's European assets. With Ross apparently staying on the sidelines, Lear Corp.'s interior trim business is left in limbo, Tynan said.
Lear said it would be willing to roll its North American interiors business into a venture with Ross if he purchased Collins & Aikman from bankruptcy. That's exactly what the vehicle seat maker did in Europe.