DETROIT -- Lear Corp. is looking to raise at least $450 million in new capital to begin to remove and reduce some of its post-Chapter 11 debt load, the company said in a regulatory filing today.
The supplier of automotive seating systems and vehicle electronics components is seeking permission from some of its lenders for a new revolving credit line worth $100 million-$125 million. It also wants to raise at least $350 million through a new bond sale.
Lear CFO Matt Simoncini said the plan is to use bond sale proceeds, combined with some of its $1.6 billion in cash, to pay-off its second lien agreement.
The company still has a first lien, which prevents the company from issuing quarterly dividends to shareholders.
J.P. Morgan analyst Himanshu Patel speculated in a research note today that the transactions, which would give Lear nearly $2 billion in liquidity, could be used to pay-off both company liens, paving the way for a one-time special dividend.
Simoncini denied that was the plan.
“To me it makes no sense to do a one-time dividend,” Simoncini said.
Industry conditions must continue to improve before the company would pay-off its first lien. Then, it will be able to pay regular quarterly dividends.
Lear, based in suburban Detroit, ranks No. 11 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $13.60 billion in 2008.