Visteon exploring restructuring options, going concern status in doubt

By Caroline Salls

Pittsburgh, May 11 - Visteon Corp. warned that there is substantial doubt about its ability to continue as a going concern and meet its debt obligations as they come due, according to a 10-Q filed Monday with the Securities and Exchange Commission.

As a result, Visteon said it is exploring various strategic and financing alternatives and has retained legal and financial advisers. In addition, the company said it is in discussions with its credit facility lenders, including an informal committee of secured term loan lenders, regarding the restructuring of the company's capital structure.

Visteon said it has also launched discussions with some of its major customers to address its liquidity and capital requirements, and any restructuring could be completed through negotiated changes to the related agreements or through a Chapter 11 bankruptcy filing.

The company said it also could be forced to file bankruptcy if it cannot reach a restructuring agreement and the credit facility lenders accelerate payment, triggering a default on Visteon's senior unsecured notes.

While Visteon said it has already taken significant restructuring and cost reduction measures and plans to implement further actions designed to provide additional liquidity, the company said there can be no assurance that those actions will provide enough funding to meet its ongoing liquidity requirements.

As previously reported, a going concern warning issued by the company's independent registered public accounting firm constitutes a default under the credit facilities, but Visteon was able to secure default waivers from the credit facility lenders.

In addition, the company said substantially all of its long-term debt has been classified as current liabilities on its most recent consolidated balance sheets.

Visteon is a Van Buren Township, Mich.-based automotive supplier.

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