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BorgWarner Inc. (NYSE:BWA), a global automotive supplier with a market capitalization of $9.5 billion and an overall "GOOD" financial health rating according to InvestingPro, reported Tuesday that it has reached a settlement with PHINIA Inc. regarding a lawsuit over value added tax (VAT) refunds. The dispute related to VAT refunds that PHINIA received or expected to receive from government agencies, following its separation from BorgWarner.
According to a statement based on an SEC filing, BorgWarner had previously recorded an asset of approximately $120 million for these VAT refunds as of June 30, 2025. Under the terms of the settlement reached on October 15, PHINIA agreed to pay BorgWarner $78 million. Of this amount, $31 million was paid immediately, $21 million is due in January 2026, and the remaining balance will be paid upon collection from government agencies, but no later than December 1, 2026. The company’s strong liquidity position, with a current ratio of 2.02, suggests it can comfortably manage this settlement process.
As a result of the agreement, BorgWarner recorded a net charge of $38 million in the third quarter of 2025. This charge reflects the reduction of VAT-related receivables, the elimination of certain company liabilities, and related legal fees. The company stated it will treat this charge as a noncomparable item, not reflective of its ongoing operations, when presenting its earnings results.
BorgWarner’s common stock and 1.00% Senior Notes due 2031 are listed on the New York Stock Exchange under the symbols NYSE:BWA and NYSE:BWA31, respectively.
This information is based on a press release statement and disclosures in a Form 8-K filing with the Securities and Exchange Commission.
In other recent news, BorgWarner Inc. reported its second-quarter 2025 earnings, showing steady sales and a positive outlook. The company announced sales of $3.6 billion, maintaining a consistent level compared to the previous year. Despite the flat sales trajectory, BorgWarner raised its full-year sales and adjusted earnings per share (EPS) guidance, indicating confidence in its future performance. This development suggests that BorgWarner is optimistic about its financial prospects for the rest of the year. These recent updates are crucial for investors looking to gauge the company’s direction. The earnings report highlights BorgWarner’s strategic planning and adaptability in the current market environment. Investors will likely find the raised guidance a positive sign, reflecting the company’s assessment of its future growth potential.
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