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DETROIT -- Visteon Corp. would keep pension plans covering about 21,000 employees and retirees intact under a revised Chapter 11 reorganization plan. The initial proposal submitted in December would have cancelled three pension plans and transferred the obligations, which were underfunded by more than $500 million, to the Pension Benefit Guarantee Corp. The suburban Detroit automotive supplier has been working with creditors, including a group of pension recipients, since its initial Chapter 11 reorganization plan was met with widespread resistance. That plan, in addition to terminating pensions, would have given Visteon's secured lenders 96 percent of the reorganized company's common stock, with the PBGC receiving about 4 percent. Unsecured creditors, including bondholders, would have received nothing. The new plan, submitted for bankruptcy court approval Monday, proposes a recovery for bondholders but not for shareholders. The amended plan converts the company's $1.63 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. The remaining equity would be distributed among holders of other unsecured notes and non-trade claims. Trade creditors would receive $23.9 million, a 50 percent recovery, the company said. The company said the plan is "a significant improvement" over its original proposal. It reflects Visteon's "improved operating and financial performance, as well as recovering industry and market conditions," the company said. The revision comes after Visteon posted fourth-quarter and full-year results that exceeded the company's projections in December. Visteon recorded net income of $128 million on revenue of $6.42 billion in 2009, for its first annual profit since being spun off from Ford Motor Co. in 2000. In December, the company had forecast a $149 million net loss for 2009 and said a full-year profit wouldn't come until in 2011. Under the revised plan, Visteon projects profits of $107 million in 2010; $87 million in 2011; $219 million in 2012; and $322 million in 2013. The plan could be heard by the court as early as next month. The company filed for bankruptcy in May, when the U.S. automotive industry was roiled by the bankruptcy of Chrysler and a looming Chapter 11 filing by General Motors.
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