Wheel supplier Hayes Lemmerz International Inc. has amended its senior secured credit facility, the company said in a statement. But the supplier says it cant promise it will meet the terms of the amended loan.
The amendment gives the company more favorable terms for its loan. For example, it revised the required ratio of net debt to earnings before interest, taxes, depreciation and amortization for the fourth quarter of 2008 and all of 2009, as well as the ratio of those initial earnings to interest, to levels that are less stringent.
The new terms come with higher interest rates on Hayes Lemmerzs term and revolving loans, a reduction of allowable capital expenditures and extra fees to the lenders. The supplier also must use money received from asset sales to prepay the term loan.
In light of the extremely difficult industry and economic conditions, no assurance can be given that the company will be able to satisfy the amended covenants, the Hayes Lemmerz statement said yesterday.
Hayes Lemmerz emerged from Chapter 11 bankruptcy protection in 2004, but its restructuring has continued. In the past two years, the company has sold a Belgian subsidiary, its brake components division and four plants in Georgia, Michigan and Indiana. It also closed a technical center in Michigan.
Hayes Lemmerz, of suburban Detroit, ranks No. 82 on the Automotive News list of top 100 global suppliers with $2.05 billion in sales of parts to automakers in fiscal year 2007.