Axle works with law firm, mulls bankruptcy

By Jui Chakravorty Das and Soyoung Kim

NEW YORK/DETROIT (Reuters) - American Axle & Manufacturing Holdings Inc is working with legal advisers as it considers restructuring options including bankruptcy, two people familiar with the matter told Reuters.

The company, a key parts supplier to General Motors Corp, is working with the law firm Shearman & Sterling as it considers debt restructuring options amid depressed auto sales and weak production, according to the sources.

Shares in the supplier fell 8 percent to $1.79.

American Axle, which has more than $1 billion in long-term debt, declined to comment on whether it would consider filing for bankruptcy.

Fitch rating agency cut American Axle's rating to CCC in April affecting $1.3 billion of debt.

The company has also reached out to GM for assistance, two sources briefed on the effort said, although it was unclear what form such aid could take.

The sources asked for anonymity because of the confidential nature of American Axle's restructuring efforts. Shearman &Sterling declined comment.

Earlier this week, American Axle said it had reached a new credit agreement with lenders that waives covenants under its revolving credit facility through July 30. It remains in talks with other lenders including JPMorgan Chase and Bank of America..