Adient has closed the transactions contemplated by its previously announced definitive agreement with joint venture partner, Yanfeng Automotive Trim Systems to make certain changes to their existing joint venture relationships entered into on 31 January and amended on 24 June this year.
At closing, Adient received cash proceeds of US$309m related to the sale of Adient’s 30% ownership stake in Yanfeng Global Automotive Interior Systems (YFAI) to Yanfeng and around US$20m related to the sale of certain mechanisms business patents and other intellectual property to Adient Yanfeng Seating Mechanisms (AYM).
In addition to the US$309m paid at the closing for its 30% ownership stake in YFAI, Adient is entitled to receive an additional US$60m 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 31 December, 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$60m deferred purchase price is fully paid.
Also, Adient and Yanfeng extended the term of Yanfeng Adient Seating’s (YFAS) joint venture agreement to December, 2038.