Visteon files for bankruptcy to protect U.S. operations
C. E. White
Automotive News
May 28, 2009 - 12:02 am ET
UPDATED: May 28 3:15 a.m.
(REUTERS) -- Visteon Corp., the auto-parts maker that hasn't posted an
annual profit since being spun off from Ford Motor Co. nine years ago,
said on Thursday it had filed for Chapter 11 bankruptcy protection for
its U.S. operations.
In a filing with the U.S. Bankruptcy Court for the District of
Delaware, Visteon listed total assets of $4.58 billion and total debts
of $5.3 million.
The Michigan-based company's unsecured creditors include a unit of
Bank of New York Mellon Corp. holding bond debts, the Pension Benefit
Guaranty Corp. and IBM, which is a trade creditor.
Visteon said it filed certain customary "first day motions" with the
court to ensure a smooth transition into Chapter 11.
"During the reorganization period, we will seek to address our capital
structure and legacy costs that are not sustainable given the current
economic environment," Visteon CEO Donald Stebbins said in a
statement.
Ford promises to help
Visteon said Ford has committed to ensure long-term continuity of
supply and to support debtor-in-possession (DIP) financing for the
restructuring efforts.
Ford is still Visteon's biggest customer and accounted for about 31
percent of its $1.35 billion of sales last quarter.
Earlier this month, Ford assumed a $163 million secured revolving
credit facility from Visteon's lenders.
The health of the U.S. auto parts supply base has been a priority for
Ford with Chrysler in bankruptcy and General Motors close to a
government-imposed deadline to restructure or follow Chrysler down
that road.
Warning signs
On May 12, Visteon said it may be forced to file for court protection
from creditors if talks with lenders failed to restructure its debt.
Three days later, Visteon said Ford had assumed a $163 million loan
from some lenders while discussions about other debt continued.
In March, the company's auditors raised significant doubt about
Visteon's ability to continue as a business.
No Visteon subsidiaries or joint ventures outside the United States
are part of the filing, the company said.