Daily News: December 4, 2012

J.P. Morgan, WFCF to Amend Facility for Federal-Mogul


Federal-Mogul Corporation, an auto parts supplier controlled by billionaire Carl Icahn, announced that it has engaged J.P. Morgan Securities and Wells Fargo Capital Finance to arrange certain amendments to its existing credit facility pursuant to which the company’s asset-based revolving loan facility would be increased and its maturity extended from 2013 to 2017.

JPMorgan Chase and Wells Fargo Bank have each agreed to commit $125 million to the new revolving facility, subject to certain conditions. In addition, the company is seeking to extend the maturity of approximately $1.8 billion of term loans outstanding under the credit facility from 2014 to 2016, and certain other modifications to the facility would be effected.

To facilitate this refinancing effort, the company has entered into an investment agreement pursuant to which it will issue approximately $150 million of common stock to a subsidiary of Icahn Enterprises, the company’s largest stockholder of record, in a private placement exempt from registration under the Securities Act of 1933. In addition, the company has also agreed to commence a subsequent rights offering of $150 million to shareholders of record. Icahn Enterprises has agreed to backstop the rights offering.

The refinancing plan is conditioned upon a voluntary prepayment by the company of up to $300 million of the extended term loans. The equity investment and existing cash balances will be used to fund such prepayment. The refinancing plan and private placement are expected to be consummated in the fourth quarter of 2012.

Southfield, MI-based Federal-Mogul designs, engineers, manufactures and distributes technologies to improve fuel economy, reduce emissions and enhance vehicle safety. The company employs 45,000 people in 34 countries.