Management at Visteon Corp. made another bullish assessment last week of its turnaround plan and growth prospects overseas.
Now if only Wall Street believed.
Fitch Ratings Service this month cut Visteon's rating substantially. It dropped the supplier of vehicle electronics, interiors and heating systems three notches, from B to triple-C. Fitch cautioned that Visteon's cash flow will be hampered by a decline in revenue from Ford Motor Co. Visteon also risks violating its bank covenants if it cannot replace secured loans that mature in 2007, Fitch said.
Visteon CEO Michael Johnston assured investors last week at the Morgan Stanley Global Automotive Conference in New York that Visteon envisions no problems replacing the facility. A $350 million term loan completed in January was oversubscribed by lending institutions, for example, he said.
Visteon, of suburban Detroit, plans to shed 23 more manufacturing plants, in addition to the 23 money-losing plants bought back by Ford last year. The company is trying to get back into the black after posting net losses of $270 million in 2005 and $1.54 billion in 2004.
Visteon stock is trading at about $4.22 a share, near its 52-week low of $3.14 set on May 11, 2005.
You may e-mail Dave Barkholz at [email protected]