Visteon Corp. exits bankruptcy with $600 million debt

Article by Christian Andrei, on October 2, 2010

Visteon Corp. has officially emerged from bankruptcy with a debt that has been reduced by about $2.1 billion. Visteon, which had once been the No. 2 maker of auto parts in the US, was able to strengthen its balance sheet while in bankruptcy and as of June 30, had $979 million in cash.

Visteon expects an investment of $300 million from over 40 bondholders, including the distressed-investment units of Deutsche Bank Securities Inc. and Goldman, Sachs & Co., and hedge fund manager Stark Investments.

They’ve also agreed to buy $950 million of new shares when Visteon exits bankruptcy. About 39% of the company’s revenue came from Asia last quarter, up from 17% in 2005.

Kirk Ludtke, an analyst with CRT Capital Group LLC in Stamford, Conn., said that these figures will be attractive to investors. In May 2009, Visteon, formerly a division of Ford Motor Co., filed for protection from creditors. It pointed to the weakening economy and auto sales as what prompted it to file.

In a recent statement, Visteon said that it exited bankruptcy with about $600 million in debt, a considerable drop from when it had a debt of $2.7 billion when it entered protection.

It can be recalled that in February 2009, US auto sales dropped to a seasonally adjusted annual rate of 9.34 million, less than half the 20.7 million rate from July 2005.

Consumers had slowed spending due to the global recession, job losses and declining home values and stock prices. Consulting firm AlixPartners LLP said that in 2009, automakers and suppliers standing for about 38% of the North American auto industry, including General Motors Corp., Chrysler LLC and Lear Corp., filed for bankruptcy protection. [via Bloomberg]

Topics: visteon, bankruptcy

If you liked the article, share on:


Login or Create new account to add a comment!


Many have been excited with the impending arrival of the next-generation Jeep Wrangler and the new 2019 Jeep Grand Wagoneer, which is slated to be the brand’s new range-topping model....
by - October 21, 2016
Chevrolet has taken the wraps off its new Chevrolet Colorado ZH2 at the fall meeting of the Association of the United States Army (AUSA). Tagged as the most extreme fuel-cell-powered...
by - October 21, 2016
Honda has unveiled the fifth generation of its hot-selling SUV – the 2017 Honda CR-V. The latest iteration of the CR-V should help it maintain its benchmark status in the...
by - October 21, 2016
Many are already expecting BMW to launch an ultra luxurious SUV that will serve at its new flagship by late 2018. Larger than the X5 and X6, the new X7...
by - October 21, 2016
Most of you may have heard or already have one of those autonomous home appliances doing the house chores. Thus, it’s not anymore unusual to see a car going places...
by - October 20, 2016