Visteon Corporation, the parts unit spun off from Ford nine years ago, has filed for Chapter 11 bankruptcy protection in Delaware.
No subsidiaries or joint ventures outside the US are part of the filing, the supplier said in a statement.
“Visteon is taking this step to maximise the long-term value of the company,” said chairman and CEO Donald Stebbins.
“During the reorganisation period, we will seek to address our capital structure and legacy costs that are not sustainable given the current economic environment. The results of these actions, combined with our innovative products and excellent product quality, will allow Visteon to emerge a financially sound and well-positioned company.”
Visteon expects to fund its operations with its US cash balance, cash flows from operations and a debtor-in-possession facility.
Ford has committed to support debtor-in-possession financing for Visteon’s restructuring and to ensure long-term continuity of supply. Other global customers have also expressed support, the supplier said.
As is normal with a Chapter 11 filing, Visteon has filed “first day motions” with the court requestingauthority to continue supplying customers, paying critical suppliers and employees.
Reuters noted that Visteon hadn’t posted an annual profit since being spun off from Ford.
Its court filing listed total assets of US$4.58bn and total debts of $5.3m.
Ford remains Visteon’s biggest customer and accounted for about 31% of its $1.35bn of sales last quarter.
Visteon had on 12 May warned 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, Reuters noted.
Last March, the company’s auditors had raised significant doubt about Visteon’s ability to continue as a business.