Adient, a global leader in automotive seating, has entered into an amendment to its previously announced definitive agreement with Yanfeng Automotive Trim Systems Co., Ltd. (Yanfeng) to make certain changes to their existing joint venture relationships.
As part of the transactions contemplated by the definitive agreement entered into on Jan. 31, 2020, Adient agreed to sell its 30 percent ownership stake in Yanfeng Global Automotive Interior Systems Co., Ltd. (YFAI) to Yanfeng for $379 million. In connection with obtaining certain required regulatory consents, Adient and Yanfeng have agreed to certain modifications to the transactions. The purchase price for the sale by Adient of its 30 percent ownership stake in YFAI will be reduced to $369 million, of which $309 million will be paid at the closing of the agreed transactions and the remaining $60 million will be paid on a deferred basis post-closing. With respect to each YFAI fiscal year ending after the closing, starting with the year ending Dec. 31, 2020, Adient will be paid an earnout in an amount equal to 30 percent of YFAI’s distributable earnings for such year until such time as the $60 million deferred purchase price is fully paid.
In addition, the board of directors of each of Yanfeng Adient Seating Co., Ltd. (YFAS) and Adient Yanfeng Seating Mechanisms Co., Ltd. (AYM) have approved the distribution of dividends to their respective shareholders in the amount of RMB 1.9 billion and RMB 1.2 billion, respectively. The dividends will be paid to the YFAS and AYM shareholders on or prior to June 30, 2020. Adient Asia Holdings Co., Limited will receive 49.99% of the YFAS dividends and 50% of the AYM dividends.
The transactions agreed on Jan. 31, 2020, as amended on June 24, 2020, except for the dividends which will be paid on or prior to June 30, 2020, are cross-conditioned on each other and closing is subject to regulatory approvals and other customary closing conditions. The transactions are expected to be completed in the fourth quarter of Adient’s current fiscal year.
