EVANSVILLE, Ind. — Accuride has announced the approval of an amendment to its senior credit facility, dated Jan. 31, 2005. In addition, the company has announced a strategic partnership with an affiliate of Sun Capital Securities Group.
The amendment adjusts certain financial covenants under the company’s credit agreement from the fourth quarter of 2008 through 2010, including leverage, interest coverage and fixed charge coverage ratios, and extends the maturity date of the revolving credit facility until Jan. 31, 2011.
Sun Capital, which currently holds approximately $70 million principal amount of the loans outstanding under Accuride’s term facility, agreed to modify these loans to become last out as to payment to the other loans outstanding under the term facility. In order to enhance the liquidity position of the company, interest on the last-out loans will accrue on a Payment in Kind (PIK) basis until Dec. 31, after which time the interest payment will continue to accrue on a PIK basis unless the company meets the required liquidity thresholds.
In connection with the modification of Sun Capital’s loans under the term facility, the company has agreed to issue warrants to Sun Capital exercisable for 25 percent of the fully-diluted common stock of the company, expand the company’s board of directors to 12 members and grant Sun Capital the right to elect five directors and nominate one independent director, and require supermajority board approval for certain corporate actions as long as Sun Capital maintains at least a 10 percent ownership in the company’s common stock. Sun Capital is also expected to provide customary strategic, business and operational support to the company. Sun Capital currently owns approximately 9.9 percent of the company’s common stock.
“We are very excited about this amendment and our new strategic partnership with Sun Capital,” said Bill Lasky, Accuride’s chairman, president and CEO. “The combination of the amendment and the alliance with Sun Capital provides the company the financial flexibility and operating expertise to execute our current business plan in order to create significant value for all our stakeholders.”
