auditors have expressed substantial doubt over the auto parts manufacturer's ability to continue as a going concern, and the company said that filing for bankruptcy protection is a possibility.
The Van Buren Township, Mich., company said in a regulatory filing that its independent registered public accounting firm included the dreaded "going concern" paragraph in an audit report. The inclusion of such an explanatory statement constitutes a default under its senior secured credit facilities, Visteon said.
Visteon, which was spun off by
in 2000, also said in its filing with the
Securities and Exchange Commission
that it "believes that substantial doubt exists as to its ability to meet its obligations as they come due through the normal course of business during 2009."
The company said that lenders have given it temporary waivers on its credit agreements, which waives the going-concern default until May 30 as long as Visteon maintains certain cash balances. A potential default on a securitization agreement has been waived until June 29.
Visteon did say it is exploring various strategic and financing alternatives and has retained legal and financial advisers, and that it may seek to reorganize under Chapter 11 bankruptcy protection if it can't negotiate a restructuring with its lenders and customers.
The news came on the same day that Visteon's U.K. unit, which includes plants in Basildon, Belfast and Enfield and employs about 600 workers, filed for bankruptcy. The unit will be placed under the control of court-appointed administrators from auditor KPMG.
Shares of Visteon, which trade on the pink sheets, were lately down 16% to 10 cents. Among other auto parts makers,
was down 6.6% while
was gaining 2%.
Among automakers, Ford was tacking on 0.4% to $2.64, and
slid 4.6% to $1.85.