Allied Holdings Inc., North America's largest vehicle hauler, has renegotiated its loan agreements and secured additional operating funds, according to court papers filed Wednesday.
The hauler had defaulted on certain covenants of its loans because of poor financial performance in December and January. Objections to the agreement must be filed within five days.
The deadline to renegotiate terms of the loans, which allow the company to operate while in Chapter 11 reorganization, had been Tuesday, April 18. Foreclosure could have pushed the company into liquidation, Allied says in court papers.
At issue are $230 million of debtor-in-possession financing - new debt the company has incurred since it filed for Chapter 11 reorganization in July 2005.
The company previously had negotiated two extensions. The agreement changes the company's financial targets for March, April and May.
Allied, of Decatur, Ga., has about 47 percent of the North American car-hauling market. It is a major shipper of finished vehicles for Detroit automakers as well as Toyota Motor Sales U.S.A. Inc. and American Honda Motor Co. Inc.
Allied's debtor-in-possession financing is through General Electric Capital Corp., Morgan Stanley Senior Funding Inc. and other lenders.
The amended agreement also calls for an additional advance of $5 million from Morgan Stanley. The hauler had warned recently that it could run out of working capital as early as May. Court papers say payment of the advance, along with interest, is due May 18.
The maturity date can be extended up to 30 days if Allied secures a commitment for an additional $20 million from lenders by May 18.
The agreement also calls for Allied to file a motion to modify its Teamster contracts, which it did last week. The hauler is seeking a 10 percent wage cut from hourly workers.
Allied has amended its bankruptcy loan agreement four times.
You may e-mail Greg Migliore at [email protected]