18.04.2009

Gehl given more time

Gehl, the US based manufacturer, acquired by Manitou last year, has entered into a forbearance agreement with its lenders in order to avoid Chapter 11 bankruptcy.

The company’s principal funding source is a revolving credit agreement that was agreed with a group of U.S. banks back in October 2006 of which around $117 million was outstanding as of the end of March. The banks had demanded repayment of the credit line in full after the company breached its loan covenants.

As part of its ongoing discussions with its lenders, the forbearance agreement rescinds and withdraws the notice of debt repayment delivered on March 31, 2009, and allows the company access to funds under the revolving credit agreement and provides up to 75 days to negotiate further changes to the agreement.

The company has repaid a portion of the outstanding credit line using cash generated from operations and anticipates making further repayments of the capital in 2009. The company also anticipates entering into a long-term secured credit facility within the 75 days to replace the existing revolving credit agreement.