Visteon projects negative free cash flow until 2009; says it may consider extending maturities

By Jennifer Lanning Drey

Portland, Ore., Feb. 16 - Visteon Corp. projects it will be free cash flow positive in 2009, once the majority of the company's restructuring activities are complete, Visteon chief executive officer Michael F. Johnston said Friday during the company's fourth quarter earnings conference call.

Visteon's guidance for 2007 currently projects free cash flow in the range of negative $125 million to negative $225 million, assuming a constant level of receivables sales.

The company expects the number to improve in 2008, due to improved EBIT-R, but remain negative.

"The near-term dynamics will be challenging for both the industry and for Visteon," Johnston said.

However, Johnston also said that with $319 million remaining in the escrow account the company set up to be used for its restructuring, Visteon is in a good position with regard to the restructuring efforts.

"With the actions we've taken in 2006, we have significant liquidity in the escrow account to fund the restructuring of the business," Johnston said.

Company chief financial officer Jim F. Palmer also highlighted during Friday's call that Visteon has no significant debt maturities until 2010.

Palmer said the company has been approached by bankers and would consider a transaction to improve liquidity or extend its maturities.

"As we have said before, the capital markets have been robust. We continue to be approached with ideas that we may consider, and if we do, we would take those opportunities to enhance liquidity or lengthen maturities," Palmer said.

Visteon reported total debt of $2.2 billion at Dec. 31, compared with $2.0 billion at the end of 2005. The change primarily reflects the closing of an additional $200 million secured term loan under Visteon's existing term loan credit agreement in November, according to a company news release.

The company ended the year with cash and cash equivalents of $1.057 billion, compared to $865 million at the end of 2005.

Visteon is a Van Buren Township, Mich., automotive systems and technology supplier.

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