SOUTHFIELD, Mich. (AP) -- Lear Corp. said Thursday that its reorganization plan was approved by a bankruptcy judge, paving the way for the auto supplier to emerge from Chapter 11 after just four months under court oversight.
Judge Allan Gropper approved the company's plan at a hearing in New York. Lear, which makes vehicle seats and electronics, said it expects the plan to become effective and for it to exit Chapter 11 on Monday, once closing conditions have been met.
Under the plan, the company's lenders will forgive billions of dollars in Lear debt in exchange for a controlling stake in the company.
"Upon emergence, we will have substantially lower debt, a strong and flexible balance sheet and in excess of $1 billion in cash," Bob Rossiter, the company's chairman, chief executive and president, said in a statement.
"This capital restructuring, combined with the significant operational restructuring we have completed since mid-2005, positions our company for profitable growth and long-term success."
Like other auto suppliers, Lear was hit hard by the economic downturn and steep drop in new vehicle production -- especially at the U.S.-based automakers -- in the months leading up to its July Chapter 11 filing.
Lear, which is based in Southfield, Mich., and posted $13.6 billion in sales for 2008, is a key supplier for both General Motors Co. and Ford Motor Co. The pair represent the company's two largest customers and account for a combined 40 percent of its sales.
Lear said Thursday that it filed an application with the New York Stock Exchange to list its new common stock under the ticker symbol "LEA." If approved, Lear expects the shares to begin trading around the same time the reorganization plan becomes effective.
