Autoliv, the worldwide leader in automotive safety systems, today announced important steps in the process to spin-off its Electronics business.
The process of spinning off the Electronics business under the name Veoneer is progressing well. Operational separation of the Electronics business was completed on schedule April 1 and critical items, including transfer of people, set-up of systems and the establishment of leadership teams, are tracking according to plan. The establishment of new boards of directors for the separate entities is also progressing well and the new boards will be announced ahead of the spin-off. The Company now anticipates trading in Veoneer to begin in the early part of the third quarter of 2018 with listings on the New York Stock Exchange and Nasdaq Stockholm.
A Registration Statement on Form 10 has been publicly filed by Veoneer, Inc. with the U.S. Securities and Exchange Commission (SEC). The registration statement provides detailed information on the business, management and historical combined financial statements of Veoneer on a “carve-out” basis, as well as information related to the anticipated spin-off. It includes a summary of the initial capitalization to be provided by Autoliv to Veoneer. The Registration Statement will be updated with additional information in subsequent amendments as further information on the spin-off is finalized.
The initial capitalization of Veoneer is expected to be provided through a capital injection from Autoliv and will provide up to $1.2 billion of cash liquidity in Veoneer (including existing cash). It is expected to be sufficient to fund Veoneer until it reaches positive cash flow. The initial capitalization also takes into account Veoneer’s on-going investments in joint ventures, particularly Zenuity, and certain anticipated business combinations.
To fund the capital injection, Autoliv intends to raise the majority of the needed capital through debt financing, while the remaining amount of the capital injection will be from Autoliv’s cash on hand. Autoliv’s ambition is to maintain its strong investment grade credit rating following the capital raise and the capital injection into Veoneer.
The main difference in the historical financial information for Veoneer on a “carve-out” basis compared to the current segment reporting for the Electronics’ business is that RD&E costs are fully attributed to the business. Furthermore, a redistribution of a portion of the historical corporate and other costs has been made to present Veoneer on a “carve-out” basis, thus including some (but not the full) cost of being a stand-alone company.
The carve-out adjustments made to create the historical financial statements of Veoneer follows financial reporting guidelines related to carve-out accounting and are not relevant for any other purpose, and should not be used for conclusions regarding Autoliv’s historical financials as a stand-alone company excluding Electronics.
We intend to provide historical financial statements for Autoliv as continuing operations with Electronics reflected as discontinued operations at a later time.
The spin-off is expected to occur in time for trading in Veoneer to begin early in the third quarter of 2018. A copy of the registration statement is available for review at www.sec.gov under the name Veoneer, Inc.
Completion of the spin-off is subject to market, regulatory and certain other conditions, including final approval by Autoliv’s Board of Directors and declaration of effectiveness of the registration statement by the SEC.
