Columbus McKinnon receives term sheet for $95 million credit facility

By Sara Rosenberg

New York, June 12 - Columbus McKinnon Corp. received a term sheet for a new $95 million credit facility due in 2006 to replace the existing loan maturing on March 31, 2003, according to a filing with the Securities and Exchange Commission. The interest rate on the new loan would be lower than the company's current interest rate on its existing loan.

In a conference call on May 21, officials said that the company is using the same lead bank from its existing bank loan, which was Fleet Bank, and anticipating a smaller syndicate.

Security for the credit facility will be a first priority security interest in all personal property, mortgages on certain real property and a pledge of the capital stock of subsidiaries, the filing said.

"The term sheet is not binding on the lenders, and we may not be able to negotiate this agreement on commercially reasonable terms, or at all," the filing said. But the document added that the company believes the reduced availability of $95 million, along with cash on hand, cash provided by operations and cash provided by the future sales of securities, will be sufficient to fund its ongoing operations and budgeted capital expenditures for the next 12 months.

On June 10, Columbus McKinnon obtained a waiver on non-compliance of certain covenants at March 31, 2002. Under the amended credit agreement, the revolving credit facility was reduced to $150 million from $206 million. The non-compliance was a result of the sale of substantially all of the assets and business of its subsidiary, Automatic Systems, Inc., according to a company press release.

In addition to the new loan, the company anticipates to receive about $43.3 million from a stock offering based on an assumed public offering price of $9.29 per share, the filing said. Proceeds from the equity sale will be used to repay a portion of outstanding debt under the existing credit facility. At March 31, the company had about $145.8 million outstanding under the loan, bearing interest at about 5.5%.

Columbus McKinnon is an Amherst, N.Y. material handling products manufacturer.

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