Archive (06/04/09) Oerlikon amended its syndicated credit facility

Financial stability ensured

Pfäffikon SZ, June 4, 2009 - Oerlikon has reached agreement with its consortium of banks on the terms for amending its existing CHF 2.5 billion credit facility. All 23 banks of the consortium agreed to the amendment. Given the challenging business environment, Oerlikon approached its banking group to amend the existing credit facility to provide sufficient flexibility to follow its stated business strategy. "The amendment of the syndicated loan is the first important step in strengthening the group's financial position", said Oerlikon's CFO Jürg Fedier. He adds: "The successful conclusion, following a proactively initiated amendment process, confirms also the support of our banking group to our plans".

The amount and tenor of the credit facility remain unchanged after the amendment. The covenant structure and pricing were adjusted to reflect Oerlikon's business outlook and also market terms for similar transactions. More specifically, the amended rates of interest are in the range of 175 to 450 basis points over LIBOR. The existing leverage covenant (ratio of net debt to adjusted EBITDA) level was aligned to proposed business plans and a capex, equity to total assets and interest cover covenant were added. In addition, the amended facility incorporates structural enhancements usual in the market, including security arrangements with share pledges on material subsidiary companies; however, no asset pledges are included.

On publication of the 2008 annual results, Oerlikon introduced a business program comprising three central work streams:

  • maintain sustainability of the group by accelerated restructuring and contingency measures;
  • secure financial stability with improvements to cash flow, reductions in working capital and refinancing;
  • enhance competitiveness through innovation and further concentration of the portfolio.

With the overall program, the company is responding to the current economic situation. Oerlikon CEO, Dr Uwe Krüger, comments: "We are well advanced with the execution of our overall corporate initiatives that aim at regaining profitability by 2010. Already earlier, we have communicated progress with our restructuring and portfolio streamlining measures. The succesful conclusion of the credit facility amendment is an important step of our strategy. We now continue to execute on all workstreams of our overall corporate program".

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