Manitowoc Co. Inc. (MTW) plans to improve the strength and flexibility of its capital structure by refinancing its existing senior secured credit facility. Besides the capital structure improvement, the proposed plan also includes reducing the interest rate paid on outstanding debt compared with interest paid under its current facility.
As per the proposed transaction, Manitowoc would further increase its revolving credit facility by $100 million to reach $500 million. Including the updated term loans the total credit facilities will amount to $1.15 billion. The transaction also intends to extend the maturity date of the company’s existing revolving credit facility and term loans from 2013 and 2014 to 2016 and 2017, respectively.
Manitowoc is set to take advantage of the strong debt markets by generating significant interest cost savings. The current plan along with the initiatives taken in 2010 will assist the company in successfully implementing its business strategy, while adding shareholders value amidst the global economic recovery and growth.
Manitowoc, known for its crawler cranes and boom trucks, had a long-term debt of $1.94 billion as of December 31, 2010. Moreover, the company incurred a debt of $2.5 billion for its $2.7 billion acquisition of Enodis in 2008 that marked its foray into food services and kitchen equipment.
We currently have a Zacks #1 Rank (short-term Strong Buy recommendation) on the stock.
The company is a multi-industry capital goods manufacturer, having more than 100 manufacturing and service facilities in 26 countries. It is one of the world’s largest providers of lifting equipment for the global construction industry.
In addition, Manitowoc is a leading manufacturer of commercial foodservice equipment serving the ice, beverage, refrigeration, food preparation and cooking needs of restaurants, convenience stores, hotels, health care and institutional applications. Manitowoc competes with Terex Corp. (TEX) and privately held Altec Industries Inc. and American Panel Corporation.
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