Visteon Files for Bankruptcy

The auto supplier firing squad just had its first casualty. Not surprising, and definitely not the last one. The bankruptcy was filed in Delaware. From the CEO:

Visteon is taking this step to maximize the long-term value of the company. During the reorganization 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.

Interesting is that Visteon's DIP comes from none other than primary beneficiary of the supplier's parts - Ford (F).

Visteon's legal advisor is Kirkland & Ellis LLP; its restructuring advisor is Alvarez & Marsal and its financial advisor is Rothschild Inc.

The 3 month chart (click to enlarge) of Visteon's Term Loan is below. Now that the uncertainty about the bankruptcy is removed, and as auto suppliers become the next UAW-safeguarded sector, look for this loan to spike in price.

Comments

[TeresaE:]

What a shock!

And this is following Visteon's move to shove most of their employees back into Ford or into the new "Automotive Holdings LLC" company that was formed.

Visteon has been gearing up for this filing for years.

Good luck to us all, as these big companies horrible business plans are shoved onto their supplier base.

Stick a fork in us, the American production machine is done.

May 28 08:25 AM

[john s. gordon:]

agreed, the spinoff of visteon by ford some years back was a foretelling of things to come.
> jack

May 28 09:09 AM

[LKofScotland:]

Great move by Ford. And now the coup de grace. With GM's bankruptcy which WAS NOT foretold by anyone suppliers are falling all over themselves to be number 1 with Job 1. (bias note: i am the proud owner of 2 F150 pick-ups--greatest vehicle ever made.) Visteon could become a big winner as a technology transfer of epic proportions is well underway. Haven't even gotten to the government contracts and the problems of warranties yet have we. If only it was as simple as your government loves to tell you and you all still believe.

May 28 12:11 PM