Visteon files for bankruptcy to protect U.S. operations
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.