NEW HAVEN, CT -- Proliance International has reached an agreement with its lender to amend its credit facility to provide access to funds for the company to rebuild and purchase automotive heat exchange inventory damaged at Proliance’s Southaven, MS, facility, which was struck by tornadoes earlier this year.

Charles Johnson, president and CEO of Proliance stated, “This amendment provides the necessary funding to effectively manage the company’s financial needs as we continue to rebuild our business operations following the damages we sustained in Southaven. We have been able to resume shipments faster than anticipated, and we are especially appreciative of the ongoing support we have received from all of our Proliance associates and our customers and suppliers around the world.”

As part of the amendment, the company will receive a waiver with respect to its 2007 financial covenants. The company will work with its lender to reset 2008 covenants to reflect the 2007 changes and the events triggered by the Southaven property damage. In addition, pursuant to the amendment, the company will be able to use insurance proceeds more favorably than it could under the original loan agreement; and with respect to any subsequent capital raise, the company will be able to use 50 percent of the proceeds to reduce its revolving debt and the remainder would reduce its term loan.

In exchange for the new amendment, the company will incur additional fees that will be amortized over the remaining life of the credit facility. The interest rate will increase under the agreement, and the company will issue market-based warrants to its lender to purchase shares of the company’s common stock.

Proliance is filing a report on Form 8-K with the Securities and Exchange Commission that will describe the amendment in greater detail. The company is in the process of completing the specific terms of the warrants and finalizing the financial covenants as contemplated by the amendment.