Visteon, the former auto supply division of Ford Motor Co., filed on May 28 for bankruptcy protection.
Michigan-based Visteon filed under chapter 11 of the bankruptcy code in federal court in Delaware, saying that Ford had agreed to providing funding through the reorganization process with so-called debtor-in-possession financing.
"Visteon expects to fund its operations with its U.S. cash balance, cash flows from operations and a debtor-in-possession facility," the company said.
"Ford Motor Company has executed a commitment letter to support debtor-in-possession financing for Visteon's restructuring efforts and to ensure long-term continuity of supply. Other global customers have also expressed their support."
Visteon said it had assets of $4.58 billion, making it one of the largest auto suppliers, and listed debts of $5.3 billion.
No Visteon subsidiaries or joint ventures outside the U.S. are part of the filing. But Visteon's British subsidiary sought creditor protection in March.
"Visteon is taking this step to maximize the long-term value of the company," said chairman and chief executive Donald Stebbins. "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."
Visteon joins in bankruptcy General Motors' former parts division, Delphi, which has been under court supervision since 2005.
Visteon operates in 27 countries and employes 31,000 people. Ford represents around 30 percent of its business, with South Korea's Hyundai accounting for 25%. French-based Renault-Nissan represents 7% of sales and Peugeot-Citroen 6%.
Copyright Agence France-Presse, 2009
