Visteon believes its auditors will express doubt about the parts maker’s viability as a going concern when they sign off the 2008 financial results statements.
In an SEC filing this week, Visteon said its financial position was due to “the impact of adverse economic and industry conditions on [our] current liquidity outlook”.
It said such comments by the auditors “would result in defaults under certain indebtedness of the company”, leading eventually to “default under the company’s principal US senior secured credit facilities”.
It added it had commenced talks with lenders over waivers or amendments to the credit facilities but “can provide no assurances that it will be able to implement any such actions in a manner or on terms that would be satisfactory to the company.”
Visteon is a group of component-making facilities separated from Ford in 2000 and remains a supplier to the automaker, which accounts for about a third of its revenue. It had warned only last month it was at risk of not complying with its debt covenants.
Visteon also said it delayed filing its 2008 annual report with the SEC because of the time needed for discussions with lenders and the “uncertainty and range of potential outcomes of these and other discussions.”
Rival Lear said recently it expected a “going concern” notice from its auditors while American Axle & Manufacturing Holdings’ auditors, too, have warned that problems at top customers General Motors and Chrysler threatened its future as a going concern.
To top it off, even GM itself has also received a going concern notice from auditors.
Dealers are not immune, either. After posting a fourth-quarter net loss on Monday, dealer group Asbury Automotive Group said its auditors had raised going concern doubts and the third largest US dealer group, Sonic Automotive, also said yesterday it was in a similar position.