Automotive technology supplier Aptiv said Monday it would draw down the remaining $1.4 billion on its revolving credit facility as it builds a war chest against the economic maelstrom caused by the novel coronavirus.
The company's board also voted to suspend its dividend of about $225 million annually. With the additional funds Aptiv said it will have cash on hand of about $1.7 billion.
"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," the company said in a press release.
Aptiv said it's "ramping down" unnamed production plants to coincide with customer plant closures and changes in vehicle production schedules.
Due to the changing automotive landscape during the pandemic, the company is also withdrawing its previous revenue guidance, choosing to provide a financial update after its first quarter 2020 earnings are released next month.
"We entered these unprecedented times with an incredibly strong balance sheet, robust business model and strategically positioned product portfolio," CEO Kevin Clark said in a statement. "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."
The deadly COVID-19 outbreak began impacting Aptiv's bottom line in China earlier this year. In mid-February, Aptiv reported that the outbreak in China was expected to push its global revenue down by as much as $200 million.
Aptiv ranks No. 20 on the Automotive News list of the top 100 global suppliers, with worldwide sales to automakers of $12.87 billion in 2018.