* Proposal provides recovery to bondholders
* Plan still gives secured lenders control of company
* Pensions to be retained; shareholders wiped out
By Tom Hals
WILMINGTON, Del., March 15 Autoparts maker
Visteon Corp VSTNQ.PK unveiled an amended bankruptcy plan on
Monday that proposed a recovery for bondholders but not for
shareholders, who started a campaign last week for a payout.
The amended plan converts the company's $1.629 billion
secured debt to 85 percent of the company's equity. Holders of
Visteon's 12.25 percent senior notes would receive 6 percent of
the company's equity and the remaining equity would be
distributed among holders of other unsecured notes and
Trade creditors would receive $23.9 million, which the
company said represented a 50-percent recovery.
The company said the plan reflected "the company's improved
operating and financial performance, as well as recovering
industry and market conditions." That allowed for distributions
to creditors and was "a significant improvement" over its
original proposal filed late last year.
The original plan proposed converting secured lender claims
into nearly all of the company's equity and giving those
lenders new debt. Under that plan, most unsecured creditors
would have been wiped out.
Unsecured creditors opposed the original plan and began
discussions with the company about an alternative proposal.
The company said the unsecured creditors' advisers had
spent four weeks at the company's headquarters in Van Buren
Township, Michigan, discussing an alternative plan. It said
those talks would continue.
The new plan also proposed retaining the company's defined
benefit pension plans. The company previously proposed severing
benefits for thousands of retirees.
The former unit of Ford Motor Co (F.N) has been
aggressively overhauling its operations as well as addressing
balance sheet problems. Its improved performance has caught the
attention of investors who have bid up its bonds and even its
shares, which rose from less than 2 cents per share in December
to more than a $1 per share this month.
Last week, hedge funds that own about 7 percent of
Visteon's shares asked to meet with the board to discuss a plan
of reorganization that would provide them with a recovery.
Shareholders have the lowest priority claim on a bankrupt
The case is In re Visteon Corp, U.S. Bankruptcy Court,
District of Delaware, No. 09-11786.
(Editing by Valerie Lee)