American Axle: GM To Provide $110 Million Payment And $100 Million Loan
18 8월 2009 - 11:42PM
Dow Jones News
American Axle & Manufacturing Holdings Inc. (AXL) will
receive a $110 million payment and loan from General Motors Co. as
the parts maker works to avoid bankruptcy.
American Axle said it reached an agreement in principal for GM
to pay $110 million to cover the contracts assumed or terminated
through its bankruptcy in June. The company also said GM will
provide a second-lien term loan of as much as $100 million.
American Axle will have the right to make multiple draws from the
loan through Sept. 20, 2013.
The new financial arrangement provides American Axle with some
much needed liquidity and support from GM which account for more
than 70% of its revenues.
The entire deal hinges on American Axle successfully
renegotiating its loan terms with its creditors. The company has an
Aug. 31 deadline.
American Axle, based in Detroit, has endured drastic demand
cutbacks as GM and other auto makers reduced production for almost
a year amid the U.S. economic recession. The reduction caused many
parts makers, such as Visteon Corp. (VSTN), to seek Chapter 11.
Shares of American Axle jumped 77% to $4.66 in earlier trading
Tuesday as investors bet that bankruptcy is no longer a threat.
American Axle's 5.25% bonds due 2014 also leapt 15 points on the
news to trade at 70 cents on the dollar, according to one trader.
The 7.875% bonds have not traded yet Tuesday, the trader said.
-By Jeff Bennett; Dow Jones Newswires;
jeff.bennett@dowjones.com; 248-204-5542
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