CLEVELAND, June 23 /PRNewswire-FirstCall/ -- Oglebay Norton Company (Pink Sheets: OGBY) today announced that it has engaged J.P. Morgan Securities as lead arranger to syndicate credit facilities for up to $230 million. The proceeds of the facilities will be used to refinance its existing senior secured credit facilities, to provide for the conversion of the convertible preferred stock and to provide for capital expansion. J.P. Morgan will launch syndication of the facilities next week.
(Logo: http://www.newscom.com/cgi-bin/prnh/19990901/CLW017)
Proposed key terms of the financing include:
* $230 million in total senior secured facilities
- $55 million, 5 year asset-based revolving credit facility with drawn
pricing of LIBOR + 125 basis points and undrawn pricing of
37.5 basis points.
- $140 million, 6 year term loan facility with drawn pricing of LIBOR +
275 basis points with a potential $35 million delayed draw facility
with undrawn pricing of 137.5 basis points.
* The term loan will be secured by a first lien on the fixed assets and
capital stock of the company with a second lien on the assets that
secure the revolver.
* The delayed draw term loan, which will be available for draw for
9 months, will serve as a backstop for opportunistic calls on the
convertible preferred stock or, alternatively, for certain capital
expenditures.
* Financial covenants include maximum leverage, minimum fixed charge
coverage and maximum capital expenditures. There will be a fixed asset
coverage test of greater than 2.0 times at closing.
Michael Lundin, President and CEO, stated, "The recently announced sale of our marine vessels has enabled us to pay down debt to approximately $160 million on a pro-forma basis. With the lower debt, the company is well positioned to refinance its existing credit facilities with more attractive pricing and terms.
"This refinancing will provide added flexibility as we execute on our stated strategy of focusing on our limestone, limestone fillers and industrial sands businesses. The financing should improve profitability by enabling us to invest in productivity-enhancing projects and pursue new market and customer opportunities, especially in the flue gas desulphurization and energy markets."
Oglebay Norton Company, a Cleveland, Ohio-based company with a 150-year tradition of service, provides essential minerals and aggregates to a broad range of markets, from building materials and environmental remediation to the energy and metallurgical industries. For more information, see http://www.oglebaynorton.com/.
Safe Harbor Statement
Certain statements contained in this release are "forward-looking" in that they reflect management's expectations and beliefs regarding the future performance of the Company and its operating segments. Such forward-looking statements are subject to uncertainties and factors relating to the Company's operations and business environment, all of which are difficult to predict and many of which are beyond the control of the Company. The Company believes that the following factors, among others, could affect its future performance and cause actual results to differ materially from those expressed or implied by forward-looking statements made by or on behalf of the Company: (1) weather conditions, particularly in the Great Lakes region, flooding; (2) fluctuations in energy, fuel and oil prices; (3) fluctuations in integrated steel production in the Great Lakes region; (4) fluctuations in Great Lakes and Mid- Atlantic construction activity; (5) economic conditions in California or population growth rates in the southwestern United States; (6) the Company's ability to complete its cost reduction initiatives; (7) the outcome of periodic negotiations of labor agreements; (8) changes in the demand for the Company's products due to changes in technology; (9) the loss, insolvency or bankruptcy of major customers, insurers or debtors; (10) changes in environmental laws; (11) an increase in the number and cost of asbestos and silica product liability claims filed against the Company and its subsidiaries and determinations by a court or jury against the Company's interest; (12) the insolvency of insurers, the effects of any coverage litigation with insurers or the adequacy of insurance; (13) changes in Federal or State law with respect to asbestos or silica product liability claims; and (14) risks related to the low trading volume of the Company's stock and the de-registration of the Company's common and convertible preferred stock with the United States Securities and Exchange Commission.
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk,
