Visteon Amends Reorganization Plan

The strongly debated reorganization plan filed by Visteon as part of its bankruptcy process was amended by the supplier today and submitted with the US Bankruptcy Court for the District of Delaware together with a disclosure statement.

The measures announced in this new plan calls for Visteon retaining the US defined benefit pension plans. As already announced by several interested parties, the new plan leaves bondholders and unsecured creditors impaired, with no recovery provided for holders of Visteon's equity.

"The fundamental tenet of this dual plan concept is that if the bondholders deliver the $1.25 billion and exit financing, the company will move forward with the rights offering sub-plan. If the bondholders are unable to raise this cash, the company will 'toggle' to the claims conversion sub-plan under guidelines of the second amended plan and related agreements," Visteon says in the plan.

The provisions of the reorganization plan are listed below.

• a rights offering sub-plan under which certain unsecured bondholders would have the opportunity to receive 95 percent of the
• equity in reorganized Visteon in exchange for $1.25 billion in cash raised through a backstopped equity rights offering. The remaining 5 percent in equity would be distributed among unsecured bondholders
• a claims conversion sub-plan, similar to the plan filed by Visteon on March 15, 2010, under which the term loan lenders would receive approximately 85 percent of the equity in reorganized Visteon and unsecured bondholders would receive approximately 15 percent of the equity
• other general unsecured creditors would receive a cash payout

Visteon vouches to have the plan approved as soon as possible, with confirmation by the court sought in July or August.