Supplier TRW Automotive Holdings Corp. plans to issue at least 14 million new shares of common stock in a move to shore up its balance sheets and pay down debt.
The offering comes after company shares reached more than $20 per share last Friday, their highest price of this year. The companys 52-week high of $21.85 per share was set in August of last year, before car and truck sales and production volumes in North America plummeted.
TRW shares today closed down 7.1 percent at $18.83 a share on the New York Stock Exchange, with twice the normal trading volume.
The move could raise about $272 million for TRW if the shares were priced at Fridays closing price of $20.27, according to an estimate contained in TRWs prospectus filed today with the Securities and Exchange Commission.
Its primarily to pay down debt, were working to pay down both our (line of credit) revolver and basically to strengthen our balance sheet, said John Wilkerson, TRW senior communications manager.
As of July 3, the company carried about $3 billion in debt, including a $1.5 billion revolving credit facility.
Another 2.1 million shares could be issued to brokers to cover over-allotments, according to a TRW regulatory filing.
TRW, based in suburban Detroit, makes a variety of vehicle safety products and systems. The company ranks No. 10 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $15.0 billion in 2008.