Yesterday, VSTNQ stock gained 4.37% and closed the session at $0.502 on nearly average trading volume. The share price just refuses to climb up, the positive thing being that there is at least long-term stabilization since the beginning of August and the previous sharp decline has been interrupted.
Among the positive announcements was the recent opening of the first plant in Russia. The facility will manufacture door panels and other interior parts for the VW Polo subcompact car and is expected to reach full capacity by March next year.
A more positive announcement was, however, an SEC filing from Tuesday, according to which the company has raised $950 million through the sale of equity securities and another $300 are to be raised. Probably, the filing is related to the confirmed by the Court at the end of last month reorganization plan of the company. It consists of two sub plans, which will bring different pay-offs to the secured lenders and the shareholders. It seems that after VSTNQ started to resume its operations, the struggle has been about who will take a larger portion of the revived company.
Under the confirmed plan, if up to $1.25 billion can be raised through a rights offering, the company will pursue the Rights Offering Sub Plan. In this case, secured lenders will be paid in cash, holders of the senior notes will get 4.9% of the distributable equity of the reorganized company, whereby some of these lenders will be eligible to participate in the rights offering for 93.1% of the reorganized VSTNQ’ common stock. Holders of Visteon common stock would receive 2% of the distributable equity and warrants to purchase shares of reorganized Visteon common stock.
Under the Claims Conversion Sub Plan, the reorganized company’s common stock will be distributed in the following way: secured lenders would get 85%, the holders of secured notes will receive either 6% or 9%. This option for emergence from the bankruptcy, however, does not foresee any recovery for VSTNQ’s current shareholders.
