Accuride Announces Second Temporary Waiver Agreement with Lenders

On August 14 Accuride Corporation announced its entry into a Second Temporary Waiver Agreement with its lenders, effectively extending its original July 1 agreement until September 7.

“We’re pleased to secure an extension of the waiver under our Credit Agreement to provide Accuride with additional time to evaluate and negotiate opportunities to refinance and recapitalise its business,” stated Jim Woodward, Accuride’s senior vice president and chief financial officer. “The company and its advisors have been working diligently on a comprehensive plan that addresses the balance sheet challenges currently facing the company due to the depressed conditions in the commercial vehicle market.”

As of June 30, 2009, Accuride had US$47.6 million cash and cash equivalents. “As we continue negotiations with our Lenders, we remain focused on managing our business through this industry downturn and providing our customers with high quality products,” said Bill Lasky, Accuride’s chairman, president and CEO. “We do not take our customer relationships lightly; our customers are the reason we exist. We will continue to pursue initiatives that drive the integrity of Accuride, the enhancement of our operational capabilities, and the outstanding quality and customer-focused services we provide.”

As consideration for the Second Temporary Waiver, Accuride agreed to provide detailed and regular financial information to a steering committee that was formed to represent the lenders in their negotiations with Accuride. Compliance with other requirements, including restrictions on incurring additional debt, making investments, and selling assets, is also necessary. In addition, Accuride has also agreed to maintain an average liquidity of $32.5 million over a rolling five business day period and a minimum liquidity of $28 million, subject to specified steering committee discretion. The temporary waiver is subject to certain early termination events, including the occurrence of other events of default under the Credit Agreement and payment by Accuride of interest on its outstanding Notes which, subject to a 30-day grace period, was due August 1, 2009.

To maintain the effectiveness of the original waiver, the company did not pay the approximately $11.7 million of interest on August 3, 2009, to the holders of its Notes and intends to use the existing 30-day grace period provided in the Note indenture to continue discussions regarding a capital restructuring with its lenders. Under the indenture, the failure to make this interest payment would not constitute an event of default that permits acceleration of the Notes until the expiration of the 30-day grace period on September 2, 2009.