Doug Del Grosso, president and CEO said 'the preliminary Q2 results demonstrate the improvement phase of the company's turnaround plan.'
He added 'the team is acting quickly and decisively to reduce the company's cash burn rate and increased liquidity.' Adient is looking at additional funding options to strengthen its balance sheet because the company said that it is currently spending $175m per month to maintain its business. Consequently, the company is taking action to resize its cost structure to address because it thinks that sales after lockdown ends, and the corona virus pandemic is under control will be lower than before the pandemic.
In March the company said it would draw $825m from an asset-based revolving credit facility. On 31 March it had approximately $1.8 bn of liquidity. But the revolving credit facility depends on the value of assets based on pledged receivables, and this is expected to shrink during the prolonged production shutdowns hitting the car industry in Europe and the Americas. This is why, the company is looking at new sources of funding. Among these, the company will be trying to gain a loan of $500m for repayment by 2025. It will do this by selling a bond privately.
Adient expects to present its second quarter and half-year financial results on 5 May 2020.