Visteon seeks approval of $37 million sale of equity in Alabama debtor

By Jennifer Lanning Drey

Portland, Ore., June 29 - Visteon Corp. requested court approval of the proposed sale of debtor Visteon Domestic Holdings, LLC's 80% equity interest in debtor Halla Climate Systems Alabama Corp., according to a Friday filing with the U.S. Bankruptcy Court for the District of Delaware.

The proposed purchaser is Halla Climate Control Corp., whose wholly owned subsidiary owns the other 20% of the equity of Halla Alabama.

Under the agreement, Halla Climate Control will pay Visteon $37 million, plus make a $26 million cash payment to satisfy an intercompany loan made by Visteon to Halla Alabama.

Halla Climate Control is a non-debtor foreign affiliate of Visteon.

According to the filing, Halla Alabama operates a 135,000-square-foot manufacturing facility responsible for manufacturing and supplying Hyundai with front-end modules and heating and air conditioning units. Hyundai represents nearly all of the company's total sales volume.

However, since Visteon's filing for bankruptcy, Hyundai has expressed concerns regarding Halla Alabama's debtor status and ability to maintain an uninterrupted supply of goods.

Visteon said Hyundai may seek to reduce its exposure by resourcing climate control products to Halla Alabama's competitors if it continues to have concerns regarding its involvement in the Chapter 11 cases.

Visteon said the sale of its interest to Halla Climate Control would preserve the key relationship.

A hearing is scheduled for July 16.

Visteon, a Van Buren Township, Mich., global automotive supplier, filed for bankruptcy on May 28 in the U.S. Bankruptcy Court for the District of Delaware. Its Chapter 11 case number is 09-11726.

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