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Tenneco continues to evaluate each of the announced government assistance programs in every country in which the Company operates and will continue to identify additional opportunities that can benefit team members in their local jurisdictions.
“Tenneco has been taking action to mitigate the financial impact of theCOVID-19 pandemic on customer demand from the very beginning through short term plant closures, deferment of discretionary spending and the reduction of capital expenditures,” said Brian Kesseler, Tenneco’s Chief Executive Officer. “The continuing near term deterioration in demand in our end markets necessitates further difficult decisions. These steps, together with the continued execution of our Accelerate plan introduced earlier this year, will allow us to return to full operations more efficiently when demand returns and allow us to continue on the path to building a stronger Tenneco. We remain in close communication with our customers to evaluate their near andmid-term demand changes and will modify our plans accordingly to effectively navigate the balance of 2020. We will communicate more specifics related to these current actions as part of our first quarter 2020 earnings call.”
Among the Tenneco locations that are continuing operations, the Company’s production facilities in China are coming back online. Some of Tenneco’s plants and product-lines servingnon-automotive and industrial customers and certain of the Company’s Motorparts facilities remain operational after being designated as essential businesses by local governments to supply aftermarket products for the transportation industry. In addition, the Company recently announced that Tenneco is supporting General Motors’ ventilator project and will supply components to be used in the initiative to increase production for this vital medical equipment.
“I want to thank our 78,000 global team members who continue to support our company and our customers during this critical time,” Kesseler said. “We’re also proud to be able to help supply those in need of medical assistance. We will continue to identify other assistance opportunities with our customers and the local communities within which our teams and their families live and work.”
Liquidity Update
Tenneco has significant liquidity available. As of March 31, 2020, Tenneco had cash balances of approximately $700 million. The Company has a revolving credit facility of $1.5 billion on which it has drawn down $700 million. The Company intends to further increase the revolver draw down to approximately $1.2 billion in the near-term to further add to cash balances and mitigate the impact from the global production slowdown. Tenneco has no significant near-term debt maturities. The revolving credit facility matures in October 2023 and is subject to customary leverage and interest coverage ratios. The Company is confident all covenant requirements have been maintained for Q1 2020 and will continue to monitor the impact of the global production slowdown to determine if a covenant amendment will be required for the balance of the year.
About Tenneco
Headquartered in Lake Forest, Illinois, Tenneco is one of the world’s leading designers, manufacturers and marketers of Aftermarket, Ride Performance, Clean Air and Powertrain products and technology solutions for diversified markets, including light vehicle, commercial truck,off-highway, industrial and the aftermarket, with 2019 revenues of $17.45 billion and approximately 78,000 employees worldwide. On October 1, 2018, Tenneco completed the acquisition of Federal-Mogul, a leading global supplier to original equipment manufacturers and the aftermarket. In the future, the company expects to separate its divisions to form two new, independent companies: DRiV, an Aftermarket and Ride Performance company, and New Tenneco, a Powertrain Technology company.
