Aptiv PLC, a global technology company focused on making mobility safer, greener, and more connected, today announced a series of actions to further enhance the company’s financial flexibility in response to the unprecedented uncertainty related to the impact the novel coronavirus (COVID-19) pandemic is having on the global automotive industry and economies around the world.
Aptiv’s financial position is very strong. However, given the increasing levels of uncertainty, the company believes it is prudent to further enhance its financial flexibility and liquidity by drawing down all remaining amounts, approximately $1.4 billion, on its Revolving Credit Facility. With the additional funds, the company will have cash on hand of approximately $1.7 billion and $2.0 billion outstanding under the existing revolver facility. To further increase capital preservation during the pandemic, Aptiv’s Board of Directors also voted to suspend the company’s dividend of approximately $225 million annually.
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The company has taken decisive actions to manage costs, capital spending, and working capital to further strengthen liquidity, including the ramping down of certain production facilities in response to customer plant closures and changes in vehicle production schedules.
“The long-term health and well-being of our employees and their families, our customers, and the broader communities where we operate is our primary concern, and we have implemented robust measures in each of our facilities to keep our employees safe,” said Kevin Clark, President and CEO, Aptiv. “We are also taking meaningful actions in partnership with our key stakeholders in every region to preserve our financial strength and successfully navigate the uncertainty ahead.”
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“We entered these unprecedented times with an incredibly strong balance sheet, robust business model, and strategically positioned product portfolio. We have the right strategy, the right portfolio, and most importantly, the right people to enable a safer, greener, and more connected future of mobility. I remain very confident in Aptiv’s long-term success,” added Clark.
As the company previously commented, the current environment is highly uncertain. The impacts of COVID-19 are increasingly reducing visibility into when customers’ plants will be fully operational, as well as creating the potential for lower consumer demand and additional supply chain interruptions, which could adversely impact vehicle production. As a result, the company has determined to withdraw guidance at this time.
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