Dana Corporation announced that it has obtained fully underwritten commitments for a $2 billion exit financing facility, marking a significant step toward the company's timely emergence from Chapter 11 reorganization. These commitments ensure that Dana will be positioned to emerge from bankruptcy by the end of January 2008, or earlier.
The exit facility will be underwritten by Citigroup Global Markets Inc., Lehman Brothers Inc., and Barclays Capital, and will consist of a $650 million asset-based revolving credit facility and a $1.35 billion term loan facility. The facilities are secured by substantially all of the assets of Dana and most of its domestic subsidiaries.
Dana Chairman and Chief Executive Officer Mike Burns said, "This is a significant step toward our emergence as a strong, financially stable company that is equipped to make significant investments in our programs and to continue providing innovative products of the highest quality to our customers worldwide. The fact that our exit facility is fully underwritten during difficult credit market conditions is a strong endorsement of our proposed capital structure and success in implementing our turnaround initiatives. In addition, it further ensures our timely emergence from Chapter 11 after confirmation of our plan of reorganization by the bankruptcy court."
Proceeds from the facility will be used by Dana to repay its debtor-in- possession credit facility, make other payments required upon exit from bankruptcy, and provide liquidity to fund working capital and other general corporate purposes.
The commitment letter remains subject to bankruptcy court approval and the funding of the commitments set forth in the commitment letter is subject to customary closing conditions.
Dana was advised by Miller Buckfire & Co., AlixPartners, and Jones Day in connection with its exit financing process.