Visteon Corporation (VC)

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NEWS

May 07, 2010 (Detroit Free Press - McClatchy-Tribune Information Services via
COMTEX) -- Auto supplier Visteon filed a new reorganization plan that could sell
95% of the company to a group of bondholders if those bondholders can raise
$1.25 billion.

Visteon also has included a backup plan if bondholders can't raise the money. In
that case, 85% of the Van Buren Township-based supplier would go to Visteon's
lenders. The other 15% would go to bondholders.

In either scenario, Visteon's U.S. pension plans would remain intact, ending
fears that the pension could be moved to the government and payments could be
reduced.

If it receives approval from creditors and U.S. Bankruptcy Court in Delaware,
the plan could put an end to months of wrangling among creditors and put the
supplier on a path to emerge from bankruptcy protection.

Visteon filed for bankruptcy protection a year ago in a string of supplier
bankruptcies that commenced as auto sales plummeted and parts makers couldn't
maintain their financial covenants.

The deal with bondholders requires bondholders to pay $300 million, and raise
another $950 million in a rights offering that would allow those bondholders to
purchase shares of a reorganized Visteon.

Those bondholders would receive 95% of Visteon. The remaining 5% of the supplier
would be distributed to other bondholders, who would also be eligible to receive
a share of $50 million.

Visteon's unsecured creditors would receive as much as 50% of their claims or
their share of $141 million.

The plan would cancel Visteon's current shares, as shareholders continue their
fight to receive some kind of compensation in a company they believe is
undervalued.

Shareholders have launched a campaign claiming that gains in Visteon's stock and
bonds indicate a higher value for the company that should allow shareholders to
receive compensation for the plan. They have asked U.S. Bankruptcy Judge
Christopher Sontchi to appoint an examiner to the supplier's bankruptcy case to
investigate the question of the company's value.