TK Aluminum seeks €80 million second-lien loan

By Sara Rosenberg

New York, March 23 - TK Aluminum Ltd.., the indirect parent of Teksid Aluminum Luxembourg, is working to obtain a new €80 million second-lien credit facility that would be used to repay some existing senior secured credit facility debt and provide additional liquidity, according to a company news release.

JPMorgan plc is the lead bank on the deal.

Of the total second-lien proceeds, about €40 million will be used to prepay some term loan debt and about €40 million will be used to pay down revolver borrowings.

In addition, the company is looking to amend its existing senior secured credit facility to provide for additional operational flexibility under the financial covenants and an additional liquidity reserve to protect the business.

"The new financing structure will allow us to continue to focus on our operational restructuring program, cost reductions and important new product launches" said Jake Hirsch, chief executive officer, in the release.

"We decided to proactively access the second-lien debt market in an effort to strengthen the company's capital structure, defer debt amortization until after 2007 and obtain greater financial flexibility and additional liquidity," added Dominick Schiano, interim chief financial officer and a managing director of Questor Management Co. LLC, in the release.

TK Aluminum is a Carmagnola, Italy-based manufacturer of aluminum engine castings for the automotive industry.

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