Seating supplier Adient is amending its previously announced agreement with Yanfeng Automotive Trim Systems (Yanfeng) to change existing joint venture relationships.

In an agreement on 31 January, 2020, Adient has agreed to sell its 30% stake in Yanfeng Global Automotive Interior Systems to Yanfeng for US$379m.

Now, connected to obtaining certain required regulatory consents, Adient and Yanfeng have agreed to modifications to the transactions.

The purchase price for the sale of Adient’s 30% ownership stake in YFAI will be reduced to US$369m of which US$309m will be paid at the closing of the agreed transactions and the remaining US$60m on a deferred basis  after closing.

In each YFAI fiscal year ending after the closing, starting with the year ending 31 December, 2020, Adient will be paid an earn out equal to 30% of YFAI’s distributable earnings for such year until such time as the US$60m deferred purchase price is fully paid.  

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In addition, the board of directors of each of Yanfeng Adient Seating (YFAS) and Adient Yanfeng Seating Mechanisms (AYM) have approved the distribution of dividends to their respective shareholders of RMB 1.9bn and RMB1.2bn, respectively.

The dividends will be paid to YFAS and AYM shareholders by 30 June, 2020.

Adient Asia Holdings will receive 49.99% of the YFAS dividends and 50% of the AYM dividends.

The transactions agreed last January, as amended on 24 June, except for the dividends which will be by 30 June, are cross-conditioned on each other and closing is subject to the usual regulatory approvals and customary closing conditions.

The transactions are expected to be completed in the fourth quarter of Adient’s current fiscal year.