Auto-industry supplier Visteon Corp. warned that the continued downturn in the global automotive industry, combined with restrictive credit markets, could hurt cash flows so significantly that it might fall out of compliance with terms of its outstanding debt instruments.
In a regulatory filing and a press release, Visteon did not provide details of the debt terms that concern it. But the supplier of auto interiors and climate and electronics products said that it is exploring options to address future liquidity needs, including administrative reductions, delaying capital expenditures, curtailing, eliminating or disposing of substantial assets or operations, and other significant restructuring measures.
The company said that at year-end it had $1.18 billion in cash and $2.76 billion in total debt, which included $75 million drawn on the company’s asset-based U.S. revolving credit facility and $92 million outstanding under its European receivables securitization facility. The company said that it drew $30 million under the asset-based revolving credit facility on Jan. 28, which exhausted substantially all of the current availability under these facilities, taking into account letters of credit issued under the U.S. facility.
Visteon noted that the European receivables securitization facility was amended as of Oct. 30, 2008 to provide additional availability and flexibility. The amendment resulted in the inclusion of the facility on the company’s year-end balance sheet. “The consolidation of this facility affected Visteon’s receivable and debt balances, with no impact on cash,” it said.