Johnson Controls Inc. (JCI) announced that Adient, the automotive seating and interiors business that it plans to spin off in October, is initiating discussions with lenders as it takes its first steps in securing its capital structure. According to JCI, Adient is targeting $3.5 billion in gross debt, consisting of $2 billion in bonds and a $1.5 billion five-year term loan. In addition, the company is targeting a $1.5 billion revolving credit facility.
“Adient is pursuing a solid and flexible capital structure with strong liquidity to support our robust business plan,” said incoming Adient Chairman and CEO R. Bruce McDonald. “Adient is well-positioned for long-term success given its strong market position, improving earnings profile and consistent ability to generate cash.”
Adient anticipates that the closing of the new credit facility will occur during the third calendar quarter of 2016. Completion of Adient’s spin-off from Johnson Controls is subject to a number of conditions, including, among others, effectiveness of Adient’s Form 10 registration statement and other customary conditions. The spin-off remains subject to final approval of the Johnson Controls board of directors.
