"What we've committed to is to support the debtor in possession (DIP) financing for Visteon. We would anticipate that others would also be involved going forward." Ford spokesman Todd Nissen was quoted as saying by Dow Jones.
According to Visteon's chief financial officer, Ford "has conditioned its continued support" on the parts maker's ability to draw in customers which will contribute to the reorganization. In all, Visteon may require in between $500 million and $700 million in debtor-in-possession financing.
The announcement of Ford's involvement comes as no surprise as Ford has said ever since Visteon filed for bankruptcy it will back it up. As the largest customer in Visteon's portfolio, Ford had no choice but to do so. In addition, Ford assumed a $163 million secured revolving credit from some of the lenders in mid-May.
Visteon filed for bankruptcy at the end of May, following a nine year-no profit time struggle. "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," Visteon Chief Executive Donald Stebbins said in a statement.
Visteon received on May 29 interim approval to use certain cash collateral to continue operations in the ordinary course of business. Hearings on some provisions of Visteon's "First Day Motions" will be held on June 19.
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