Anchor Glass Container Corporation announced 15 February 2005 that it has entered into a USD 20 million revolving credit facility with Madeleine L.L.C., an affiliate of its largest stockholders, funds…
Anchor Glass Container Corporation announced 15 February 2005 that it has entered into a USD 20 million revolving credit facility with Madeleine L.L.C., an affiliate of its largest stockholders, funds and accounts managed by Cerberus Capital Management L.P and its affiliates. As availability under the new facility is not subject to a borrowing base, the new facility will provide the company with liquidity in excess of that provided by the borrowing base under its USD 115 million primary lending facility. The company anticipates that it will have approximately USD 22 million of availability under its two revolving credit facilities, following the interest payment on its USD 350 million senior secured notes due 2013, which was due to be paid on 15 February 2005. The new revolving credit facility will mature on 30 August 2007, contemporaneously with the maturity of the company“s existing revolving credit facility, and will bear interest on drawn portions thereof at LIBOR plus 8%. Interest on the new facility will be payable in kind if availability under the company“s existing revolving credit facility is less than an agreed upon threshold. The new revolving credit facility will be secured by a second lien on the company“s inventory, receivables and general intangibles. Anchor Glass also announced that it has reached an agreement with its lenders under its existing revolving credit facility to modify the fixed charge coverage ratio under the facility for the remainder of 2005 as it seeks to reduce costs and improve free cash flow generation. In addition, the lenders have waived Anchor Glass“ expected failure to comply with its fixed charge coverage ratio covenant as of 31 December 2004 that resulted from the firm“s weaker than anticipated cash flows and operating results during the 4Q. Anchor Glass expects to announce final 4Q results on 9 March 2005. Anchor Glass has also entered into a similar agreement and waiver with its lender under its USD 11.7 million capital lease arrangements. The company says it is continuing the implementation of the results of its previously announced operational review to increase asset productivity, improve working capital efficiency, reduce capital spending and boost free cash flow generation. To date, the company has implemented programs to reduce procurement costs, to lower labor costs through its previously announced reduction in force and through other initiatives, and to ameliorate increases in freight costs through increasing load density. Management is actively pursuing other cost reduction and revenue enhancement initiatives. Anchor Glass Container Corporation is the third largest manufacturer of glass containers in the United States.