Adient, a global leader in automotive seating, announced recently it has closed the transactions contemplated by its previously announced definitive agreement with joint-venture partner Yanfeng Automotive Trim Systems Co. Ltd. (Yanfeng) to make certain changes to their existing joint-venture relationship that was entered into on January 31 and amended on June 24, 2020.
At closing, Adient received cash proceeds of US$ 309 million related to the sale of Adient’s 30% ownership stake in Yanfeng Global Automotive Interior Systems Co. Ltd. (YFAI) to Yanfeng and approximately US $20 million related to the sale of certain mechanisms business patents and other intellectual property to Adient Yanfeng Seating Mechanisms Co. Ltd. (AYM).
In addition to the US $309 million paid at the closing for its 30% ownership stake in YFAI, Adient is entitled to receive an additional US $60 million for the sale of such stake, payable on a deferred basis.
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% of YFAI’s distributable earnings for such year until such time as the US $60 million deferred purchase price is fully paid. Also, Adient and Yanfeng extended the term of Yanfeng Adient Seating Co., Ltd.’s (YFAS) joint venture agreement to December 2038.
