BorgWarner Inc. wants to raise at least $275 million in a convertible debt offering to shore up its balance sheet, the supplier said today.
The offering comes as the suburban Detroit supplier of air management and transmission systems is negotiating an extension to its $600 million revolving credit line, which expires in July.
Some of BorgWarners bankers want to shrink the amount of credit they make available to the supplier, the company said today in filings with the U.S. Securities and Exchange Commission.
BorgWarner said it expects the renegotiated credit line and the cash to be raised from the note offering to be less than what the company has under its current credit line.
The note offering is the latest move by the supplier to preserve its cash position as parts orders have remained slow.
BorgWarner suspended its dividend March 5 -- a move expected to save $60 million a year. The company had about $103 million in cash on hand at the end of 2008.
The company has also been trimming its workforce as car and truck production volumes were at roughly half their level in early 2008.