ATCHISON, Kan., Sep 18, 2001 /PRNewswire via COMTEX/ -- Atchison Casting Corporation (NYSE: FDY chart, msgs) today announced that its 95% owned U.K. subsidiary, Atchison Casting UK Limited ("ACUK"), entered a new financing agreement. ACUK is the parent of Sheffield Forgemasters Group Limited ("Sheffield"), the parent company of the Company's UK operations.
At July 31, 2001, the Company's backlog stood at a record high of approximately $211.0 million. Primarily due to expenses associated with the industrial accident at Jahn Foundry in 1999 (including the dispute over insurance coverage), three plant closures, the investigation of accounting irregularities at the Pennsylvania Foundry Group, various attempts to refinance its bank credit facility and high natural gas rates last winter, the Company's current credit facility does not provide enough availability to fund the necessary growth to meet the backlog. To provide additional working capital to fund future growth, ACUK entered a new, three year, 25 million British pound facility with Burdale Financial Limited, an affiliate of Congress Financial Corporation. The purpose of this credit facility is to fund working capital requirements at Sheffield, as well as the Company's subsidiary in France, Fonderie d'Autun, provide security for Sheffield's foreign currency exchange contract and performance bond commitments and provide for additional working capital funds in North America. This facility will be secured by substantially all of Sheffield's assets in the U.K.
"We are very pleased to enter into this relationship with Burdale Financial Limited and Congress Financial Corporation," said Hugh H. Aiken, CEO. "This agreement will help meet our working capital requirements at our operations in both the UK and France, and is expected to provide additional working capital for our North American operations. We are trying to negotiate a one-year extension to the Company's U.S. credit line. An extension would allow us the time needed to attempt to negotiate a new, long-term banking arrangement," concluded Mr. Aiken. The Company had previously entered a Forbearance Agreement with the lenders under its bank credit facility, which has now been extended to October 12, 2001. No assurance can be given that the Company's lenders will grant another extension.
ACC produces iron, steel and non-ferrous castings for a wide variety of equipment, capital goods and consumer markets. |
