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Visteon Amends Reorganization Plan

Auto parts maker which filed for Chapter 11 last May, said the change reflects its improved financial performance as well as recovering auto sales.

DETROIT (AP) -- Auto parts maker Visteon amended its reorganization plan and now says it will give 85 percent of shares in a reorganized company to secured term lenders.

It also plans to keep its defined benefit pension plans.

The company, which filed for Chapter 11 bankruptcy protection last May, said the change reflects its improved financial performance as well as recovering auto sales.

Under the plan, which Visteon said is supported by a committee of term loan holders and other lenders, the term lenders' entire $1.6 billion secured claim will be converted to equity in a reorganized company.

Visteon said it is negotiating with a group of bondholders about a plan that would give them rights to buy stock in the reorganized company.

"To date, the company has not yet received a proposal that it considers acceptable," Visteon said in a statement issued Monday.

Under the plan revealed this week, those who hold Visteon's 12.25 percent senior notes will get a prorated share of 6 percent of the stock, giving them about 50 percent recovery of face value of their claims.

Those who hold other Visteon unsecured notes would get about 9 percent of the shares, a 20 percent recovery, the company said.

Trade creditors, or companies that supplied materials and parts, will get a prorated share of $23.9 million in cash, allowing them to recover about half what is owed to them, the company said.

Visteon Corp., based in Van Buren Township, Mich., said the distributions are better than the company's original reorganization plan, but it still leaves bondholders and other unsecured creditors "substantially impaired."

Shareholders would get nothing under the plan, for which Visteon will seek U.S. bankruptcy court approval on April 13.

Visteon posted a $276 million fourth-quarter 2009 profit in February, helped by cost-cutting measures and an uneven recovery in the global auto industry. It made $184 million for all of 2009 as sales improved across all major regions where it sells parts.

The company is still recovering, however, after it piled up more than $1 billion in losses in 2007 and 2008 combined.

Visteon makes climate control, electronic and interior parts for automakers. It employs about 29,500 people in 25 countries and was spun off from Ford Motor Co. in 1999.

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