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TI Automotive Arranging New Debt to Fund Dividend?


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Ti Automotive Ltd.'s owners are setting up a $1.25 billion loan to refinance the company's debt and pay themselves a $435 million dividend, says Bloomberg News, which cites unnamed sources.

TI Automotive is an Auburn Hills, Mich.-based supplier of fluid handling systems. It was acquired in 2007 by a group of hedge funds led by Oaktree Capital Group and Duquesne Capital Management.

JPMorgan Chase & Co. has arranged the loan and is soliciting other lenders to join in, according to Bloomberg. One of the news service's sources estimates the scheme will raise TI's debt level to 3.5 times pretax earnings from 2.4 currently.

Bloomberg says TI Automotive borrowed $550 million in 2012 to fund a similar payout. The new plan comes as talks apparently have ended to sell the company to Bain Capital Partners or Pamplona Capital Management.

Reuters reported in February that Cooper-Standard Holdings Inc., a competitor in the fluid handling market, has expressed interest in the company.

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