Visteon Reaches Agreement with Term Loan Steering Committee and Agent to Support Company's Plan of Reorganization
VAN BUREN TOWNSHIP, Mich., July 28, 2010 /PRNewswire-FirstCall/ -- Visteon Corporation (OTC: VSTNQ) announced today that the company has signed a letter agreement with the four financial institutions comprising a steering committee of the company's term loan lenders and the agent for the company's term loan facility, in which the steering committee and the agent affirmed their support of the company's fourth amended plan of reorganization.
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The support, which the company will receive pursuant to the letter agreement, takes various forms. First, holders of a majority of the $1.5 billion term loan (i.e., approximately 55 percent of the outstanding amount), including members of the steering committee as well as several other large term loan lenders, agreed to vote in favor of the plan. In addition, the steering committee has agreed to formally recommend to the remaining term loan lenders that they vote in favor of the plan. The term loan agent (Wilmington Trust) also agreed, at the direction of a majority of the term loan lenders (which the term loan agent will have as a result of this letter agreement), to cease all litigation efforts it is undertaking in connection with confirmation of the plan (including all of its discovery efforts) if the term lender class accepts the plan and to withdraw with prejudice its currently pending appeal of Visteon's equity commitment agreement and bondholder plan support agreement. Finally, the term loan agent agreed to provide affirmative support of the plan throughout the Chapter 11 case including at the confirmation hearing if the term lender class accepts the plan.
As part of the letter agreement, Visteon acknowledged that the plan will provide the term lenders with post-petition interest at the default rate and will support the compensation for professional fees and expenses. Additionally, consistent with the plan, Visteon has acknowledged that if the term lender class votes in favor of the plan, Visteon will not seek reinstatement of the term loan.
This letter agreement will ensure that a significant portion of Visteon's outstanding prepetition secured debt will vote in favor of and affirmatively support Visteon's plan. As the company moves toward the deadline for voting on its plan of reorganization, the support Visteon has now received from its secured lenders, along with the previously committed support of Visteon's bondholders pursuant to their own plan support agreement, and the official committee of unsecured creditors' explicit endorsement of the plan, represents another positive step in Visteon's plan confirmation process.
Visteon Corporation is a leading global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers. With corporate offices in Van Buren Township, Mich. (U.S.); Shanghai, China; and Chelmsford, UK; the company has facilities in 25 countries and employs approximately 28,500 people.
The risks and uncertainties and the terms of any reorganization plan ultimately confirmed can affect the value of our various pre-petition liabilities, common stock and/or other securities. No assurance can be given as to what values, if any, will be ascribed in the Chapter 11 proceedings to each of these constituencies. A plan of reorganization could result in holders of our liabilities and/or securities receiving no value for their interests. Because of such possibilities, the value of these liabilities and/or securities is highly speculative. Accordingly, we urge that caution be exercised with respect to existing and future investments in any of these liabilities and/or securities. Caution should be taken not to place undue reliance on our forward-looking statements, which represent our view only as of the date of this release, and which we assume no obligation to update.
