SAF-HOLLAND has reached agreement with its banks on a restructuring and extension of the existing $474 million credit line until 2014. Negotiations have been successfully completed.
With this new agreement, the company improves its financial strength and secures flexibility and sufficient liquidity for its long-term growth course. SAF-HOLLAND believes it is now equipped to participate in the anticipated upswing in the truck and trailer market. The financing takes into consideration the clear changes in the framework conditions that have occurred since mid-2008 and creates a solid foundation for a secure future.
“We have reached a good agreement with the banks -- one that puts the company on solid financial footing and, most importantly, gives us the room we need to continue to pursue our strategic goals,” says Wilfried Trepels, CFO of SAF-HOLLAND. “At the same time, the new financing confirms the degree of confidence that the banks have in our outstanding market position and in our competitiveness. Our prospects are good: We are seeing initial signs of a revival in the markets. SAF-HOLLAND as a global supplier of quality systems and components for the commercial vehicle industry is in an excellent position to benefit to an above-average degree from a recovery."
The new financing consists of the following key elements:
- The existing financing with a credit line of EUR $472 million which has been in place since February 2008 will be extended until September 2014. The first repayments of principal will be made in February 2012.
- The changed market and risk situation has been taken into account with the new conditions.
- The agreement gives the company additional liquidity and flexibility. In exchange, the banks obtain enhanced security in the event of pending illiquidity or imminent insolvency. The new contract is subject to approval from an extraordinary Annual General Meeting of SAF-HOLLAND S.A.
The restructuring measures are expected to result in savings in personnel and non-personnel expenses of $93 million by the end of 2009. To that end, locations will be consolidated and capacities reduced. Moreover, inventory reductions have led to a considerable decrease in net working capital need.