Visteon, Steering Committee, Agent Reach Agreement for Reorg Plan
Thursday, July 29, 2010
Visteon Corporation announced that it 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.
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% 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.
Creditors will have until July 30 to vote on the plan and the bankruptcy court has scheduled a plan confirmation trial to begin on September 28.
Visteon Corporation is a global automotive supplier that designs, engineers and manufactures innovative climate, interior, electronic and lighting products for vehicle manufacturers.
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