VAN BUREN TOWNSHIP, Mich., June 1, 2010 /PRNewswire-FirstCall/ -- Visteon Corporation (OTC: VSTNQ) announced that after a thorough analysis, it has rejected an unsolicited proposal from Johnson Controls, Inc. to purchase certain assets associated with Visteon's interiors and electronics businesses. Visteon conveyed the reasons for its decision in a letter sent today from Visteon to Johnson Controls. The contents of the letter follow:
The Board of Directors of Visteon has studied your proposal carefully and has unanimously concluded that our stakeholders, as well as our customers and employees, are best served by moving forward with our previously announced Plan of Reorganization to emerge from bankruptcy as a strong, independent, stand-alone company.
Following your expression of interest in acquiring certain assets associated with our interiors and electronics businesses, our Board, assisted by the Company's financial advisers, took the time to conduct a thorough review and analysis of your proposal.
Without risk-adjusting your proposal, our careful analysis demonstrates that your acquisition of selected assets, while excluding certain liabilities, would accelerate other costs and would not significantly enhance recoveries to our creditors or provide recovery for our equity holders. Additionally, the realization of other risks associated with the proposed transaction would negatively impact our creditors and leave equity holders further removed from any recovery. It is also likely your proposal would involve a lengthy extension to the time we would remain in bankruptcy, which could undermine much of the successful work we have done to emerge as a strong company in the sector.
In short, we have determined that our Plan of Reorganization is the best path forward for Visteon and that your proposal does not warrant further consideration. Given all of the above, we trust you will respect our decision.
On a related matter, I am concerned that JCI's recent contacts with our customers and aggressive characterizations of your proposal could potentially damage our business and relationships with key customers. I assume these communications are occurring without your knowledge and ask that you personally see that such communications end.
Finally, because of the public announcement of your proposal, the Company is obliged to share the contents of this letter with its stakeholders, and intends to do so imminently through a press release.
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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.
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not guarantees of future results and conditions but rather are subject to various factors, risks and uncertainties that could cause our actual results to differ materially from those expressed in these forward-looking statements, including, but not limited to,
- our ability to maintain adequate liquidity to fund our operations during the Chapter 11 proceedings and to fund a plan of reorganization and thereafter, including obtaining sufficient "exit" financing; maintaining normal terms with our vendors and service providers during and after the Chapter 11 proceedings and complying with the covenants and other terms of our financing agreements;
- our ability to obtain court approval with respect to motions in the Chapter 11 proceedings prosecuted from time to time and to develop, prosecute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 proceedings and to consummate all of the transactions contemplated by one or more such plans of reorganization or upon which consummation of such plans may be conditioned;
- conditions within the automotive industry, including (i) the automotive vehicle production volumes and schedules of our customers, and in particular Ford's and Hyundai-Kia's vehicle production volumes, (ii) the financial condition of our customers or suppliers and the effects of any restructuring or reorganization plans that may be undertaken by our customers or suppliers or work stoppages at our customers or suppliers, and (iii) possible disruptions in the supply of commodities to us or our customers due to financial distress or work stoppages;
- general economic conditions, including changes in interest rates and fuel prices; the timing and expenses related to internal restructurings, employee reductions, acquisitions or dispositions and the effect of pension and other post-employment benefit obligations; and
- those factors identified in our filings with the SEC (including our Annual Report on Form 10-K for the fiscal year ended Dec. 31, 2009).
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.
SOURCE Visteon Corporation