Automotive electronics supplier Visteon Corp. today announced a $1.75 billion special cash distribution to shareholders and a stock buyback program of up to $500 million.
The programs are part of the company’s plan to return between $2.5 billion and $2.75 billion to shareholders, Visteon CEO Sachin Lawande said.
“After completing the capital return program, Visteon expects to be well-capitalized and well-positioned for both organic growth and value-accretive acquisition,” Lawande said in a statement.
The record date for the cash distribution -- $43.40 per share -- is Jan. 15 and is payable through Jan. 22.
The programs are funded by proceeds from Visteon’s sale of its stake in what was the Halla Visteon Climate Control Corp., its former South Korean unit, in June. Visteon completed the sale of its 70-percent ownership interest to Hankook Tire Co. and South Korean investment partner Hahn & Co. for $3.6 billion in June.
Wells Fargo analyst David Lim said in a note the move was “anticipated” and will have a “benign impact” on company shares today. He was right. Visteon shares fell 0.3 percent to close the day at $118.45.
“Long-term, we like CEO Lawande’s strategic vision,” Lim wrote. “In our view, it is a matter of management ability to execute on the plan.”
Visteon is ranked No. 31 on Automotive News’ list of top 100 global suppliers with an estimated $7.5 billion in 2014 sales to automakers. The suburban Detroit company provides cockpit electronics to several automakers including Nissan, Mazda, General Motors, BMW and its former parent company, Ford Motor Co. Visteon spun off from Ford in 2000.