Shares of Visteon Corporation (OTC: VSTNQ) surged more than 70% in today�s trading. The OTC stock reached a high of $1.28 in early trading. At last check, it was up 76.06% to $1.26, with volume up from daily average of 4.34 million to 4.56 million. Van Buren Township, Michigan-based Visteon is supplies components to automotive OEMs worldwide.
The OTC stock jumped after news surfaced that Johnson Controls Inc. (NYSE: JCI) expressed an interest to acquire Visteon�s interiors and electronics businesses. Johnson Controls offered $1.25 billion in cash for the two businesses, though Johnson has not disclosed any other terms or details of the proposed acquisition offer. But the news was enough to generate a huge interest in Visteon.
On May 28, 2009, Visteon along with some of its subsidiaries in the U.S. filed for reorganization relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court. On May 7, this year, the company announced the filing of a second amended plan of reorganization and disclosure statement with the U.S. Bankruptcy Court. Under the second amended plan, some unsecured bondholders will be given an opportunity to receive 95% of equity in reorganized Visteon in exchange of $1.25 billion in cash. This cash will be raised through backstopped equity rights offering. Meanwhile, secured creditors will be paid in full from the proceeds of the capital raise and exit financing.
Earlier this year, Visteon sold its radar system business to Autoliv Inc. (NYSE: ALV). In its first quarter, Visteon reported net income of $233 million. Donald J. Stebbins, chairman and CEO of Visteon, said that the first-quarter results benefited from an increase in global vehicle production.
The OTC stock has a 52-week range of $0.01-$2.03. The stock has a beta of 3.51. Currently, the stock is above its 50-day and 200-day moving averages.
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