Adient sets price for $795 million senior unsecured notes

PLYMOUTH, Mich. - Adient (NYSE: NYSE:ADNT), a major player in the automotive seating market currently valued at $1.53 billion, has priced a private offering of senior unsecured notes at $795 million with a 7.50% yield, maturing in 2033. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics, despite its stock experiencing significant volatility with a -29% return over the past six months. The offering, conducted by its subsidiary Adient Global Holdings Ltd, is slated to conclude on February 3, 2025, provided all standard closing conditions are met.

The company plans to allocate the net proceeds from this offering, in combination with its available cash, to redeem its existing 4.875% senior unsecured notes due in 2026 and to cover related fees and expenses. This strategic financial move is aimed at managing the company’s debt profile, which currently stands at $2.63 billion with a debt-to-equity ratio of 1.28. InvestingPro data reveals the company maintains a healthy current ratio of 1.08 and generated $336 million in levered free cash flow over the last twelve months.

The notes are being offered in a private transaction, relying on an exemption from the Securities Act of 1933 registration requirements. They are available to "qualified institutional buyers" in line with Rule 144A and to non-U.S. persons outside the United States under Regulation S.

Adient has clarified that this press release is neither an offer to sell nor a solicitation to buy the notes or any other securities. There will be no sales in jurisdictions where such actions would be unlawful without proper registration or qualification under the relevant securities laws.

Employing over 70,000 people across 29 countries, Adient boasts more than 200 manufacturing and assembly plants globally. The company’s comprehensive capabilities span the entire process of automotive seat production, from design and engineering to manufacturing, catering to all major original equipment manufacturers (OEMs). With annual revenue of $14.52 billion, though operating with modest gross profit margins of 6.18%, the company demonstrates significant scale in its operations. For deeper insights into Adient’s financial health and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro, which covers over 1,400 US equities with detailed analysis and actionable intelligence.

The issuance of these notes is not registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent registration or an exemption from such requirements.

This financial maneuver is based on a press release statement and should be considered with an understanding of the various risks and uncertainties that could influence the company’s future results, as outlined in their cautionary statement regarding forward-looking statements.

Investors and interested parties should note that forward-looking statements are not guarantees of future performance and actual results could differ materially from those projected.

In other recent news, Adient, a global automotive seating supplier, reported mixed financial results for the first quarter of 2025, with earnings falling short of analyst estimates and revenue surpassing expectations. The company posted adjusted earnings per share of $0.27, missing the consensus of $0.31 by $0.04, while its quarterly revenue of $3.5 billion exceeded the consensus estimate of $3.44 billion. Adient’s adjusted EBITDA for the quarter was $196 million, in line with expectations due to lower customer production during the period.

In additional recent developments, Adient announced its intention to offer $795 million in new senior unsecured notes due in 2033, aiming to manage its debt profile effectively. The company plans to use the proceeds from the note offering, along with its available cash, to redeem its existing 4.875% senior unsecured notes due in 2026.

Analyst firm CFRA has cut Adient’s stock price target to $14 and maintained a Sell rating, citing concerns about the company’s financial position, which shows a net debt of $1.54 billion and an anticipated free cash flow of only $180 million for fiscal year 2025. Adient also revised its guidance for fiscal year 2026, lowering net sales projections to approximately $13.9 billion and adjusted EBITDA to $850 million, due to lower sales from exchange rates and anticipated volume declines in the EMEA and China regions. Despite these challenges, Adient maintains a focus on operational efficiency and strategic growth initiatives.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.