Fitch Ratings on has Visteon Corp’s debt rating further into junk status because of concerns about the company’s cash flow as it undertakes a major restructuring.
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The Associated Press said Fitch lowered Visteon from B to CCC. The agency ratings reportedly said Visteon will be hurt by a decline in revenues from Visteon’s former parent, Ford as the automaker cuts production and looks for new suppliers. So far this year, Ford has cut production by 6.5% compared with 2005, Fitch said. Half of Visteon’s sales went to Ford last year.
According to AP, Fitch also said it’s unclear whether Visteon will make a profit from newly won business because of its restructuring costs. The company is expected to close or sell 23 facilities over the next few years.
“Given the rapid pace of change in the industry, the lack of technology-driven, sustainable-margin products and Visteon’s revenue pressures, more extensive restructuring efforts could be required,” Fitch said, according to the report.
Visteon had $US2.8bn in debt at the end of last year, Fitch said, according to The Associated Press.
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