VAN BUREN TOWNSHIP, Mich.,
Aug. 13, 2013 /PRNewswire/ -- Visteon
Corporation (NYSE:VC) today announced that it has entered into an
agreement with Huayu Automotive Systems Co., Ltd. (HASCO) to sell
its 50 percent stake in Chinese joint venture Yanfeng Visteon
Automotive Trim Systems Co., Ltd. (YFV), as well as its direct
interests in other related interiors joint ventures, to HASCO.
Additionally, Visteon and HASCO agreed to modify their existing
electronics ventures in China such
that Visteon will obtain control of the majority of Yanfeng Visteon
Automotive Electronics Co., Ltd. (YFVE).
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The collective transactions are valued at approximately
$1.5 billion, with Visteon receiving
$1.2 billion for the portfolio of
non-electronics operations. Visteon's stake in YFVE will be valued
at approximately $300 million. The
transactions, which are subject to customary government and
regulatory approvals, are expected to be completed in multiple
stages and substantially completed by June
2015. Visteon expects to receive 90 percent of the proceeds
at or near initial closing.
"These transactions support our focus on our core climate and
electronics businesses and will bring significant benefits to
Visteon, our customers and our shareholders," said Timothy D. Leuliette, president and CEO of
Visteon. "Selling the non-controlled YFV interiors business will
generate significant cash that will allow us to return
approximately $1.2 billion in value
to our shareholders through our share repurchase program from
November 2012 through December 2015.
"Furthermore, these transactions will strengthen our global
electronics position by consolidating the majority of YFVE and its
high-growth customer order book," Leuliette said. "We have enjoyed
a strong relationship with HASCO through our YFV joint venture, and
are pleased to continue this relationship in strategic core
products within the fast-growing vehicle cockpit electronics
market."
Visteon will receive cash payments of approximately $1.25 billion for the sale of its interests in
YFV and other related interiors joint ventures, and will pay
approximately $70 million to gain
control of the majority of YFVE. Approximately $1.1 billion of the cash proceeds will be
received at or around completion of the initial transactions, which
is expected to occur before Dec. 31,
2013, subject to required approvals. The vast majority of
the remainder of the cash proceeds will be received by June 2015.
Cash Transaction
Proceeds
|
(Dollars
in Millions)
|
Value of YFV 50%
Stake
|
$928
|
Direct Stakes in
Other Interiors JVs
|
96
|
Dividends from Other
Interiors JVs
|
28
|
Gross
Proceeds
|
$1,053
|
|
|
Cash
Distribution*
|
198
|
Gross
Proceeds w/ Distribution
|
$1,251
|
|
|
Payment to Gain YFVE
Consolidation
|
(68)
|
Net Cash
Proceeds
|
$1,183
|
*Actual distribution
could vary between $184 million and $211 million due to the
proration of certain distributions which depend on the closing date
of the transaction.
|
|
|
|
|
In conjunction with the transaction, Visteon's board of
directors raised the authorization of Visteon's remaining share
repurchase program to $1 billion over
the next two years, increasing by $875
million the existing repurchase program. Including
repurchases since November 2012, this
would increase Visteon's total completed authorized share
repurchases to $1.175 billion.
The transactions support Visteon's concentration on its core
growth businesses – Halla Visteon Climate Control Corp., of which
Visteon owns 70 percent, and Visteon Electronics – both of which
are industry leaders exhibiting higher-than-segment growth.
The YFV joint venture had 2012 revenue of approximately
$7.2 billion USD. YFV was established
in 1994 between Ford and Shanghai Automotive Industrial Company
(SAIC). Ford transferred the equity to Visteon in 2000 when Visteon
became an independent company. SAIC transferred the equity to HASCO
as part of a public listing in 2009. YFVE was formed in 1994 as a
joint venture of Ford and Shanghai Auto Instrumentation Co., and
integrated into YFV in 2002.
Advising Visteon on the transaction were Rothschild Inc.;
Skadden, Arps, Slate, Meagher & Flom LLP; and Goldman Sachs
Co.
About Visteon
Visteon is a leading global automotive supplier delivering value
for vehicle manufacturers and shareholders through a family of
businesses including:
- Halla Visteon Climate Control, majority-owned by Visteon and
the world's second-largest global supplier of automotive climate
components and systems.
- Visteon Electronics, a leading supplier of audio and
infotainment, driver information, center stack electronics and
feature control modules.
- Visteon Interiors, a global provider of vehicle cockpit
modules, instrument panels, consoles and door trim modules.
- Yanfeng Visteon Automotive Trim Systems Co., Ltd., a successful
non-consolidated China-based
partnership between Visteon and Shanghai Automotive Industry
Corporation's automotive components group, Huayu Automotive
Systems.
Through this family of enterprises, Visteon designs, engineers
and manufactures innovative components and systems for virtually
every vehicle manufacturer worldwide, and these businesses
generated $13.8 billion in sales in
2012, including non-consolidated operations. With corporate offices
in Van Buren Township, Mich.
(U.S.); Shanghai, China; and
Chelmsford, UK; Visteon has
facilities in 29 countries and employs through its various
businesses, including non-consolidated operations, approximately
55,000 people. Learn more at www.visteon.com.
Forward-looking Information
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements are not guarantees of future
results and conditions but rather are subject to various factors,
risks and uncertainties that could cause our actual results to
differ materially from those expressed in these forward-looking
statements, including, but not limited to: (1) conditions within
the automotive industry, including (i) the automotive vehicle
production volumes and schedules of our customers, (ii) the
financial condition of our customers and the effects of any
restructuring or reorganization plans that may be undertaken by our
customers or suppliers, including work stoppages, and (iii)
possible disruptions in the supply of commodities to us or our
customers due to financial distress, work stoppages, natural
disasters or civil unrest; (2) our ability to satisfy future
capital and liquidity requirements; including our ability to access
the credit and capital markets at the times and in the amounts
needed and on terms acceptable to us; our ability to comply with
financial and other covenants in our credit agreements; and the
continuation of acceptable supplier payment terms; (3) our ability
to satisfy pension and other post-employment benefit obligations;
(4) our ability to access funds generated by foreign subsidiaries
and joint ventures on a timely and cost-effective basis; (5) our
ability to execute on our transformational plans and cost-reduction
initiatives in the amounts and on the timing contemplated; (6)
general economic conditions, including changes in interest rates,
currency exchange rates and fuel prices; (7) the timing and
expenses related to internal restructurings, employee reductions,
acquisitions or dispositions and the effect of pension and other
post-employment benefit obligations; (8) increases in raw material
and energy costs and our ability to offset or recover these costs,
increases in our warranty, product liability and recall costs or
the outcome of legal or regulatory proceedings to which we are or
may become a party; and (9) those factors identified in our filings
with the SEC. Caution should be taken not to place undue reliance
on our forward-looking statements, which represent our view only as
of the date of this release, and which we assume no obligation to
update. New business wins and re-wins do not represent firm orders
or firm commitments from customers, but are based on various
assumptions, including the timing and duration of product launches,
vehicle production levels, customer price reductions and currency
exchange rates.
SOURCE Visteon Corporation