Bankrupt U.S. auto parts supplier Visteon Corp is in talks with at least three bank groups on exit financing worth about $700 million, two people familiar with the matter said.
Morgan Stanley and Barclays Capital are leading competing groups to provide financing for Visteon to emerge from bankruptcy more than a year after it filed for Chapter 11 protection, the sources said.
Goldman Sachs, Deutsche Bank and Wells Fargo also formed a group that is in talks with Visteon to provide financing, the sources said.
The $700 million exit financing for Visteon would comprise a $200 million asset-backed loan and a $500 million term loan, said the sources who asked not to be named because the discussions are private.
Visteon, the former parts unit of Ford that was spun off from the automaker in 2000, filed for Chapter 11 in May last year, a casualty of the auto industry crisis that also sent General Motors GM.UL and Chrysler into bankruptcy.
The company is working to obtain exit financing to support our emergence from Chapter 11, Visteon spokesman Jim Fisher told Reuters. He declined to comment further.
Barclays Capital and Deutsche Bank declined comment. Goldman Sachs, Wells Fargo and Morgan Stanley were not immediately available for comment.
The competition among banks to provide financing for the Van Buren Township, Michigan-based supplier underscores the turnaround in creditor sentiment as the U.S. auto industry emerges from its worst downturn in three decades.
In May 2009, on the cusp of the industry's crisis that culminated in GM's bankruptcy filing on June 1. 2009, Ford had to step in to provide Visteon with debtor-in-possession financing.
Visteon, a maker of electronics, lighting and interior components for autos, is a major supplier to Ford as well as Hyundai Motor Co and drew more than half of its revenue from the two automakers in the second quarter.
Visteon used bankruptcy to overhaul its operations as well as its balance sheet. Its sales rose 32 percent to $3.85 billion in the first half of this year from the same period a year earlier, while it had a $32 million net income in the first half, compared to the year-earlier loss of $110 million.
Johnson Controls Inc made an unsolicited $1.25 billion cash bid for most of Visteon's assets in May, an offer rejected by Visteon's board.
Visteon is trying to emerge from bankruptcy as soon as this fall under the control of holders of $870 million of unsecured notes. Main creditor and shareholder classes have dropped their objection to Visteon's latest amended reorganization plan.
A confirmation hearing on Visteon's reorganization plan has been scheduled for August 31.
The case is In re Visteon Corp, U.S. Bankruptcy Court, District of Delaware, No. 09-11786.
(Reporting by Soyoung Kim, additional reporting by Kevin Krolicki in Detroit, Tom Hals in Delaware and Philipp Halstrick in Frankfurt. Editing by Robert MacMillan)