Adient Ltd., the company that will be formed when the automotive seating and interiors business is spun off from Glendale-based Johnson Controls Inc. on October 31, has started to discuss its capital structure with lenders ahead of its launch.
The company met with more than 100 representatives of major banks this morning in New York to present its structure, said Glen Ponczak, spokesman for Adient.
The company, which will be based in London and maintain a corporate office in Milwaukee, plans to secure a $1.5 billion revolving credit facility and $3.5 billion in gross debt, made up of $2 billion in bonds and a $1.5 billion five-year term loan.
The banks will now decide whether they want to buy the bonds and give a final commitment by July 20. The debt facilities close on July 22, and tranches will begin in August, Ponczak said. Adient expects to establish the credit facility in the third quarter.
“Adient is pursuing a solid and flexible capital structure with strong liquidity to support our robust business plan,” said Bruce McDonald, incoming Adient chairman and chief executive officer. “Adient is well positioned for long-term success given its strong market position, improving earnings profile and consistent ability to generate cash.”
Adient is expected to have about $20 billion in consolidated revenue. It will have 230 locations in 33 countries and approximately 75,000 employees. The spinoff is awaiting final approval from the Johnson Controls board and must meet other regulatory conditions.