Metaldyne Corp. is in talks with its lenders to seek waivers for late financial reporting and to secure continued access to the $200 million revolver portion of its bank debt. Metaldyne is conducting an inquiry into the disclosure that the controller of its US Sintered division made several allegations that he participated in actions, which affected the company's reporting. As a result, the company is unable to file its 10-K on time, according to a filing.
J.P. Morgan is the administrative and collateral agent and Credit Suisse First Boston is syndication agent on the bank debt. Comerica Bank, First Union National Bank (now Wachovia Securities), National City Bank and Bank One also have agent roles. Metaldyne also has a $399.5 million "D" loan. The loan was quoted at 1001/8-101 by MarkIt/LoanX after the revelations. A spokeswoman for Metaldyne said the company is still in talks with the creditors and there is no specified timeframe for the resolution of the affair.
According to a statement from Metaldyne, the controller said that following the November 2000 acquisition of Metaldyne by Heartland Industrial Partners, he deliberately understated revenue at the Sintered division by up to $10 million. He alleges that these understatements were part of an effort to disguise overstatements of income by approximately $20 million at the Sintered division from 1996-99, prior to the acquisition by Heartland. The Sintered division is a part of the company's engine segment and represents approximately 10% of net sales.