Auto Parts Supplier Visteon Files Chapter 11

Former parent company Ford has committed to support debtor-in-possession financing for Visteon's restructuring.
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Visteon

and some of its U.S. subsidiaries filed for Chapter 11 bankruptcy protection Thursday.

The auto parts supplier filed its petition in the U.S. Bankruptcy Court for the District of Delaware. Visteon said no subsidiaries or joint ventures outside the U.S. were part of the filing.

"Visteon is taking this step to maximize the long-term value of the company," said Donald J. Stebbins, chairman and CEO, in a statement. "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 company, once a subsidiary of

Ford

(F) - Get Report

, expects to fund its operations with cash on hand, cash flows from operations and a debtor-in-possession facility. Ford has committed to support debtor-in-possession financing for Visteon's restructuring.

Ford accounted for about 31% of the company's first-quarter product sales.

Earlier this month, Visteon posted a sharp drop in first-quarter revenue as automakers cut back on their output in the face of dwindling car sales. According to Visteon's latest quarterly filing with regulators, the company had total liabilities of $3.96 billion and total assets of $4.56 billion at March 31. Cash and short-term investments totaled $625 million.

Concurrent with the Chapter 11 filing, Visteon filed certain customary "first day motions" with the court to ensure a smooth transition into Chapter 11, seeking the authority to continue serving customers and honoring customer programs, and paying suppliers and workers.

Visteon has facilities in 27 countries and employs about 31,000 people.

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