THE car-parts maker TI Automotive has breached its banking covenants and begun talks with its lenders on a comprehensive restructuring.

Oxford-based TI has a 90-year pedigree, including a spell in the FTSE 100. It employs 16,000 in 27 countries – more than 1,000 in Britain – and claims its parts are found in half the world’s cars. TI makes a range of components, but specialises in fuel tanks, pipes and brake lines.

The £1.4 billion turnover group, owned by two American investment firms, has been hammered by the international slump in car sales. UK car production is down nearly 60%, with similar falls in America and other large markets.

Despite a refinancing 18 months ago, which meant it would not have to repay any principal on its loans until 2012, the company is understood to have breached covenants on its loans at the end of last year. Standard & Poor’s, the credit-rating agency, withdrew its ratings on the firm in January immediately after issuing a downgrade notice.

TI is now thought to have appointed the law firm Weil Gotshal to advise on a £455m restructuring of its debts. Advisers believe TI may need up to £200m of new cash.

Yesterday the firm declined to comment on its future.

TI’s last accounts at Companies House, which cover the 2007 calendar year, show it made a loss of £50m on sales of £1.4 billion.

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