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Visteon in Ch 11
Visteon Files for Bankruptcy as Auto Parts Sales Fall (Update1)
By Dawn McCarty and Alex Ortolani
May 28 (Bloomberg) -- Visteon Corp., the former parts- making unit of Ford Motor Co., sought bankruptcy protection from creditors after sales to automakers fell.
The company filed a Chapter 11 petition in U.S. Bankruptcy Court in Delaware that listed liabilities of as much as $50 million and assets of more than $1 billion. Ford will provide debtor-in-possession financing, Van Buren, Michigan-based Visteon said, adding the partsmaker will also use its cash balance and cash flows from operations to fund the business.
Chrysler LLC filed for bankruptcy last month and General Motors Corp., the largest U.S. automaker, may seek protection from creditors as soon as this weekend as car sales have plummeted. In the U.S., automakers’ sales plunged 37 percent through April, with sales at Dearborn, Michigan-based Ford, Visteon’s largest customer, dropping 40 percent.
“Visteon is taking this step to maximize the long-term value of the company,” Donald J. Stebbins, chairman and chief executive officer, said in a statement. “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’s fourth-quarter net loss widened to $328 million, or $2.53 a share, the company said Feb. 25. To save cash, Visteon said in January it would suspend matching contributions to employee 401(k) retirement plans as it moved to cut 800 salaried jobs. The company has shut or sold 30 plants in three years.
‘Financial Distress’
Visteon’s shares plunged 92 percent in the last 12 months and closed yesterday at 31 cents.
As many as one-third of the more than 4,000 U.S. auto suppliers face “imminent financial distress,” according to the Original Equipment Suppliers Association.
Companies that make most of their sales to U.S. automakers, such as Lear Corp., American Axle & Manufacturing Holdings Inc. and Tenneco Inc., the world’s largest maker of vehicle-exhaust systems, have either had or may have trouble meeting loan terms as their debt climbs against equity.
Visteon, spun off from Ford in June 2000, hasn’t reported an annual profit since that year, and last posted a quarterly profit more than two years ago. The company sells vehicle climate systems, interior parts, and lighting and electronic systems and has about 33,500 employees.
The case is Visteon Corp., 09-11787, U.S. Bankruptcy Court, District of Delaware (Delaware).
Visteon Files for Bankruptcy as Auto Parts Sales Fall (Update1)
By Dawn McCarty and Alex Ortolani
May 28 (Bloomberg) -- Visteon Corp., the former parts- making unit of Ford Motor Co., sought bankruptcy protection from creditors after sales to automakers fell.
The company filed a Chapter 11 petition in U.S. Bankruptcy Court in Delaware that listed liabilities of as much as $50 million and assets of more than $1 billion. Ford will provide debtor-in-possession financing, Van Buren, Michigan-based Visteon said, adding the partsmaker will also use its cash balance and cash flows from operations to fund the business.
Chrysler LLC filed for bankruptcy last month and General Motors Corp., the largest U.S. automaker, may seek protection from creditors as soon as this weekend as car sales have plummeted. In the U.S., automakers’ sales plunged 37 percent through April, with sales at Dearborn, Michigan-based Ford, Visteon’s largest customer, dropping 40 percent.
“Visteon is taking this step to maximize the long-term value of the company,” Donald J. Stebbins, chairman and chief executive officer, said in a statement. “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’s fourth-quarter net loss widened to $328 million, or $2.53 a share, the company said Feb. 25. To save cash, Visteon said in January it would suspend matching contributions to employee 401(k) retirement plans as it moved to cut 800 salaried jobs. The company has shut or sold 30 plants in three years.
‘Financial Distress’
Visteon’s shares plunged 92 percent in the last 12 months and closed yesterday at 31 cents.
As many as one-third of the more than 4,000 U.S. auto suppliers face “imminent financial distress,” according to the Original Equipment Suppliers Association.
Companies that make most of their sales to U.S. automakers, such as Lear Corp., American Axle & Manufacturing Holdings Inc. and Tenneco Inc., the world’s largest maker of vehicle-exhaust systems, have either had or may have trouble meeting loan terms as their debt climbs against equity.
Visteon, spun off from Ford in June 2000, hasn’t reported an annual profit since that year, and last posted a quarterly profit more than two years ago. The company sells vehicle climate systems, interior parts, and lighting and electronic systems and has about 33,500 employees.
The case is Visteon Corp., 09-11787, U.S. Bankruptcy Court, District of Delaware (Delaware).
