March 1, 2012 / 11:10 AM / 7 years ago

Saft eyes acquisitions after refinancing debt

PARIS, March 1 (Reuters) - French battery maker Saft said it was seeking to speed up its development through acquisitions in 2012 after cashing in on the end of its joint venture with U.S. auto parts supplier Johnson Controls Inc .

Saft, which received $145 million in cash for its share of the joint venture which ended in September, said on Thursday it had refinanced about $280 million in debt through bank loans and a bond issue in dollars.

“We had ended the 2011 fiscal year with an extremely significant cash level,” Chief Financial Officer Bruno Dathis told Reuters in an interview, adding that as well as paying a previously announced dividend of 1 euro per share, Saft used the cash to cut debt.

The group has 120-125 million euros in cash left, he said.

“We would like to use the rest of the available cash to possibly make acquisitions if opportunities arise in the coming months,” he said.

The group is eyeing “modest-sized” companies in China or Russia, as well as businesses which could help Saft improve its technology in lithium-ion or enter new markets and technologies.

Last September, Saft and Johnson Controls, the largest U.S. auto parts supplier, said they were ending a five-year partnership in lithium-ion batteries designed for hybrid and electric vehicles.

Today, Dathis said the company was giving itself some time to think over its electric vehicle market strategy.

“Our goal is to discuss with the different car manufacturers, especially European ones, and see if there is room, on the zero emission car market, for a group of Saft’s size,” Dathis said.

Saft said it had refinanced its debt with a five-year syndicated loan of 100 million euros ($133.77 million) as well as a $150 million bond issue on the private U.S. market, maturing between 2019 and 2022.

It also obtained a 100 million euro revolving credit line which it does not intend to use at first, Dathis said, but which gives the company flexibility for the future.

“The aim of this refinancing was twofold: diversify the company’s financing sources, since previous debt was entirely bank loans, and extend the debt maturities of the group.”

Saft’s gross debt fell 120 million euros to 216 million after these operations.

“The refinancing gives the company good room for manoeuvre especially to perhaps engage in new diversification,” Françoise Delva, analyst at Gilbert Dupont wrote in a note.

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