Thursday, May 28, 2009

Auto Parts Maker Visteon Files Bankruptcy Protection

. Thursday, May 28, 2009

By stockOzone team

U.S. auto parts maker Visteon Corp (VSTN.PK) 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 $5.32 billion. The Michigan-based company's unsecured creditors include a unit of Bank of New York Mellon Corp (BK.N) holding bond debts, the Pension Benefit Guaranty Corp and IBM (IBM.N), 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 Chief Executive Donald Stebbins said in a statement.

No Visteon subsidiaries or joint ventures outside the United States are part of the filing, the company said, adding that it would continue its operations throughout the reorganization process.

Visteon, which Ford Motor Co (F.N) spun off in 2000, said the car maker had made a commitment to support debtor-in-possession (DIP) financing for the restructuring efforts and to ensure long-term continuity of supply.

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 Corp (GM.N) close to a government-imposed deadline to restructure or follow Chrysler down that road.

Visteon shares closed at 31 cents on Wednesday.

The case is In re: Visteon Corp., U.S. Bankruptcy Court, District of Delaware, No. 09-11786.

Disclosure: Author does not own any of the stocks discussed here.

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