TROY, Mich., Oct. 27 /PRNewswire-FirstCall/ -- Champion Enterprises,
Inc. (NYSE: CHB), a leader in factory-built construction, announced today
that it has completed an amendment of its senior secured credit agreement.
The amendment generally covers the period beginning Sept. 27, 2008 and
ending Jan. 2, 2010.
During the effected period, the financial covenants have been amended
to eliminate the maximum senior leverage ratio, minimum interest coverage
ratio and minimum fixed charge ratio in lieu of new minimum quarter-end
liquidity and minimum twelve-month EBITDA covenants.
During its third quarter ended Sept. 27, 2008, the Company borrowed
$25.0 million under its revolving line of credit. Pursuant to the
amendment, the Company repaid $10.0 million of the revolving loan and $23.5
million of its term debt allocated pro rata among the U.S. dollar
denominated and Sterling denominated term loans, both due 2012. These
transactions, together, resulted in a net debt reduction of $8.5 million.
During the effected period, the interest rates for borrowings under the
revolving line of credit and the U.S. dollar and Sterling denominated term
loans were increased from the London Interbank Offered Rate ("LIBOR") plus
3.25 percent to LIBOR plus 6.50 percent. For all borrowings, interest of
LIBOR plus 5.00 percent will be paid in cash while the remaining 1.50
percent may be paid in kind. Additionally, a LIBOR floor of 3.25 percent
was provided for in the agreement.
The interest rates may be reduced if the Company makes additional term
loan prepayments during the effected period. For prepayments aggregating
between $10 and $20 million the rate of interest on all remaining balances
will be reduced to LIBOR plus 5.50 percent (of which 0.50 percent may be
paid in kind); for prepayments aggregating between $20 and $30 million the
rate will be reset to LIBOR plus 5.00 percent, all paid in cash; and for
prepayments totaling $30 million or more the rate will be reset to LIBOR
plus 4.50 percent, all paid in cash.
The Company also agreed to reduce its synthetic letter of credit
facility by $16.5 million by moving approximately $12.2 million of
outstanding undrawn letters of credit to its revolving credit facility and
canceling approximately $4.3 million of unused capacity. As a result, while
the total size of the Company's revolving credit facility remains at $40
million, its unused capacity now stands at approximately $12.8 million.
"We are pleased to have completed this amendment of our credit
agreement during these trying times in our markets," stated William
Griffiths, chairman, president and chief executive officer of Champion
Enterprises, Inc. "The revised terms reduced Champion's strong cash
position only modestly, and provide the Company with important additional
flexibility through the end of 2009 as we manage through the uncertainties
of today's environment."
The Company plans to release its financial results for the third
quarter ended Sept. 27, 2008 on Nov. 5, 2008. Details for Champion's
quarterly conference call with analysts are available on its website
http://www.championhomes.com under the "Investors" link.
About Champion
Troy, Michigan-based Champion Enterprises, Inc., a leader in
factory-built construction, operates 32 manufacturing facilities in North
America and the United Kingdom working with independent retailers, builders
and developers. The Champion family of builders produces manufactured and
modular homes, as well as modular buildings for government and commercial
applications. For more information, please visit http://www.championhomes.com.
SOURCE Champion Enterprises, Inc.
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Related links:
http://www.championhomes.com
http://www.prnewswire.com/comp/110861.html/
CONTACT:
Laurie Van Raemdonck, Vice President,
Investor Relations, +1-248-614-8267,
lvanraemdonck@championhomes.net, or Phyllis Knight, Executive
Vice President and CFO, +1-248-614-8200, both of Champion
Enterprises, Inc.
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