Visteon To Sell 50% Stake In Yanfeng JV For $1.25 Bln

(RTTNews) - Automotive supplier Visteon Corp. (VC) Tuesday said that it has entered into various agreements regarding its Chinese joint ventures with its partner Huayu Automotive Systems Co., Ltd. According to Visteon, the deals are in line with its focus on core businesses.

Under the deals, the supplier of climate, electronics and interiors systems to automotive manufacturers agreed to sell out its 50 percent stake in Chinese joint venture Yanfeng Visteon Automotive Trim Systems Co., Ltd. as well as its direct interests in other related interiors joint ventures to Huayu Automotive. Both companies also agreed to modify their existing electronics ventures in China, with which Visteon will obtain control of the majority of Yanfeng Visteon Automotive Electronics Co., Ltd.

In the transactions, Visteon will receive cash payments of approximately $1.25 billion for the portfolio of non-electronics operations, while its stake in Yanfeng Visteon Automotive Electronics will be valued at about $300 million. The company will pay approximately $70 million to gain control of the majority of automotive electronics joint venture.

The deals are subject to customary government and regulatory approvals, and are expected to be completed in multiple stages and substantially completed by June 2015.

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 December 31, subject to required approvals. The company noted that vast majority of the remainder of the cash proceeds will be received by June 2015.

Visteon President and Chief Executive Officer Timothy Leuliette said, "These transactions support our focus on our core climate and electronics businesses... Furthermore, these transactions will strengthen our global electronics position by consolidating the majority of YFVE and its high-growth customer order book."

In relation to the transaction, Visteon said its board of directors raised the authorization of its remaining share repurchase program to $1 billion over the next two years, up by $875 million in the existing repurchase program.

The Automotive Trim Systems joint venture, which was established between Ford Motot Co. (F) and Shanghai Automotive Industrial Co., had 2012 revenue of approximately $7.2 billion. Ford transferred the equity to Visteon in 2000 when Visteon became an independent company. Automotive Electronics joint venture was formed between Ford and Shanghai Auto Instrumentation Co.

In the deals, Rothschild Inc., Skadden, Arps, Slate, Meagher & Flom LLP, and Goldman Sachs Co. advised Visteon.

Visteon shares closed Monday's trading at $69.02, up $1.60 or 2.37 percent.