Tower Takes Out GE Loan

Tower Automotive Inc., the biggest maker of vehicle frames, obtained a $50-million loan from a unit of General Electric Co. to help make up for a cash shortfall as customers stop paying in advance for parts. The Novi, Mich.-based company, which has posted losses in four of the last five quarters, will get about $44 million from GE Commercial Finance, using accounts receivable as collateral, according to a statement Tuesday.

From MEMA Industry News

NOVI, MI — Tower Automotive Inc., the biggest maker of vehicle frames, obtained a $50-million loan from a unit of General Electric Co. to help make up for a cash shortfall as customers stop paying in advance for parts.

The Novi, Mich.-based company, which has posted losses in four of the last five quarters, will get about $44 million from GE Commercial Finance, using accounts receivable as collateral, according to a statement Tuesday.

The loan is a critical component of Tower’s bid to offset the decline in payments after North American customers, including Ford Motor Co. and General Motors Corp., ended early payment programs for parts, the company said.

Tower was negotiating with lenders including General Electric for a $200-million loan and to amend its current credit line to permit the new borrowing. In November, Tower hired Rothschild LLC to help arrange the loan. The supplier on Dec. 3 deferred a $4.4-million dividend on preferred securities due at the end of the year.

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