Manitou last week announced that its subsidiary, Gehl Co., has entered into an amendment of its bank credit agreement allowing continued borrowing for the next 24 months. Gehl’s amended credit agreement with its U.S. bank lenders provides for a total credit commitment of $105 million and a term of 24 months.
This agreement includes two separate credit facilities:
• A revolving line for $80 million based on the company’s North American inventories and accounts receivable maturing on June 26, 2011.
• A term loan of $25 million payable in quarterly installments through June 26, 2011.
As part of the amended credit agreement, Gehl has granted to its bank lenders a security interest in all of its North American assets. The amended credit agreement replaces the company’s October 2006 $125 million unsecured credit facility.
The amended credit agreement addresses all matters that gave rise to the forbearance agreement the company entered into with its U.S. bank lenders on April 16. Gehl has significantly reduced its outstanding borrowing using operating cash flows created in part by the cost savings initiatives implemented over the past months.
“In an unprecedented financial and economic environment, the Gehl team has been successful in renegotiating its credit line,” said Malcolm Moore, president of Gehl Co. “This important achievement should bolster the confidence of our business partners and employees, and allow us to devote our full attention to running the business and preparing for the eventual upturn of the compact equipment marketplace.”
“The successful renegotiation of the Gehl credit agreement is an important step in the improvement of the company’s situation at a time of economic turmoil,” said Jean-Christophe Giroux, president of Gehl parent company Manitou B.F. “We can now focus on implementing operating synergies within the overall Manitou group. Furthermore, this will allow the Manitou group to complete negotiations with its French bank lenders to amend a portion of its October 2008 credit agreement before the end of July.”
Headquartered in West Bend, Wis., Gehl Co. is a manufacturer and distributor of compact equipment used worldwide in construction and agricultural markets. Founded in 1859, the company became a subsidiary of the Manitou Group in October 2008. The company markets its products under the Gehl and Mustang brand names.
Manitou is a French corporation headquartered in Ancenis, Loire-Atlantique. It designs, assembles and distributes material handling equipment used in construction, agriculture and industrial applications.