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Home > BizTimes Daily > Archives > February 9, 2010
Grede lands $60 million revolving credit agreement
Published February 9, 2010 - BizTimes Daily
Grede Holdings LLC today announced that the company entered into a new revolving credit and security agreement with Bank of America as a lender and as agent for the lenders.
Wells Fargo Capital Finance, part of Wells Fargo & Company, is a co-lender on the transaction.
The new Revolving Credit Agreement provides up to $60 million to support the company’s working capital needs and other general corporate purposes. It is secured by accounts receivables and inventory of the company and has a term of three years, expiring in February 2013.
“Given the restrictive credit markets of today, the new financing agreement validates Grede’s actions as further evidence of the Company’s future vitality,” said Lou Lavorata, chief financial officer (CFO) of Grede. “Through our rigorous turnaround activities, we have brought together two well-positioned companies that have outstanding synergies, a strong balance sheet, low debt, and excellent support from our bank partners.”
Grede Holdings LLC was formed recently through the combination of the assets of the former Milwaukee-based Grede Foundries Inc. with Citation Corp. Grede Foundries had filed for Chapter 11 bankruptcy reorganization.
The transactions included the closing of the purchase of substantially all the assets of Grede Foundries by Grede LLC, an entity controlled by a private investment fund managed by Wayzata Investment Partners LLC. The transactions also were facilitated by additional equity investment from Wayzata and Citation’s largest shareholder, GSC Group. The new company is controlled by Wayzata and led by Doug Grimm, who is chairman, president and chief executive officer.
The new Grede is headquartered in Novi, Mich.
“The combination of Citation and Grede creates, what we believe is, the most diversified foundry company in North America with one of the strongest balance sheets in the industry,” Grimm said. “We expect revenue to reach $600 million in 2010 through our combined business in the automotive, industrial and heavy truck markets. The significant equity investment from Wayzata and GSC has reduced total funded debt of the two companies by 80 percent, or $110 million. This gives us a best-in-class financial profile, allows us to invest appropriately and weather economic cyclicality moving forward.”
The new Grede has 2,700 employees, 14 foundries and two machining facilities with nearly 600,000 tons of iron casting capacity.
