Valeo Electrical Systems, Inc. Cleared to Emerge From Chapter 11; Court Confirms Plan Of Reorganization; Creditor Payments to Begin in October

    ROCHESTER, N.Y.--Sept. 25, 2002--Valeo Electrical Systems Inc. (VESI) was cleared to emerge from the protection of Chapter 11 of the U.S. Bankruptcy Code, as the U.S. Bankruptcy Court today confirmed the company's Plan of Reorganization.
    Pursuant to orders signed today by the Honorable Stuart M. Bernstein, VESI's Plan of Reorganization is expected to become effective on October 7, 2002, and payments to creditors holding allowed claims will commence shortly thereafter. Under the terms of the Plan, which was endorsed by the Official Committee of Unsecured Creditors in VESI's Chapter 11 case, unsecured creditors will receive 95 percent of their allowed claims against the company.
    On August 21, the Court had approved the Disclosure Statement relating to VESI's Chapter 11 case, and authorized the company to solicit acceptances from its creditors. The Plan received overwhelming approval from VESI's creditors, as more than 90 percent of those voting filed acceptances by the September 19, 2002 ballot deadline.
    Commenting on the confirmation of the Plan, VESI executive vice president and general manager of the Rochester site, Walter Kneuer said, "This is an important day for VESI, the culmination of a long process that reached this successful conclusion thanks to the support of key stakeholders - especially our employees and suppliers. Looking ahead, the real significance of emerging from Chapter 11 is that VESI now has a new and solid framework for competing in the future, and for continuing to serve our customers as a part of Rochester's manufacturing base."
    VESI filed for Chapter 11 on December 14, 2001 to protect its operations in the face of a difficult competitive situation. VESI's parent company Valeo has agreed to fund the terms of the Plan by contributing $226 million ($190 million on the Effective Date and the balance in 2003) to recapitalize VESI.
    VESI manufactures automotive wiper systems, motors and other components in North America for sale to car and truck manufacturers, component suppliers and other customers. VESI's manufacturing operations are primarily located in a facility in Rochester. It is a subsidiary of Valeo, an independent industrial Group fully focused on the design, production and sale of components, integrated systems and modules for cars and trucks. Valeo ranks among the world's top automotive suppliers.
    Detailed information about the VESI Chapter 11 filing can be found at (www.valeoelectricalsystems.com).