Visteon expects to emerge from bankruptcy protection in early October after settling almost all disputes with former owner Ford.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The settlement assures that Ford will generate about US$600m in annual sales for Visteon, according to documents filed late last week in the US bankruptcy court in Wilmington, Delaware, Reuters reported.
It would also end Visteon’s obligation to reimburse Ford for about $105m in pension and retiree benefit costs, the documents show.
Visteon said the agreement avoids the potential for years of potential litigation, and “represents the final piece of the puzzle in Visteon’s Chapter 11 reorganisation and the restructuring of its commercial relationship with Ford.”
A hearing was set for today (29 September).
Separately, Visteon said that in connection with its bankruptcy exit it plans to raise $1.25bn of equity capital through a rights offering, and borrow up to $700m in secured debt financings.
The supplier said, if the rights offering takes place, it expects also to privately issue 45.15m new common shares.
The company discussed its capital-raising plans in a US Securities and Exchange Commission filing.
Visteon filed for US ‘Chapter 11 protection’ in May 2009 after the recession slashed domestic demand for new vehicles.
The company will emerge under the control of bondholders including Goldman Sachs and hedge funds Oak Hill Advisors and Silver Point Capital, Reuters noted.
Ford spun off Visteon in 2000.
